Title

Agreement between Japan and Mongolia for an Economic Partnership 

Preamble

Preamble

Japan and Mongolia,

Conscious of their warm relationship and strong economic and political ties that have developed through growing trade and investment and mutually beneficial cooperation between the Parties;

Realizing that a dynamic and rapidly changing global environment brought about by globalization and closer integration among economies in the world presents many new economic challenges and opportunities to the Parties;
Recognizing that the economies of the Parties are endowed with conditions to complement each other and that this complementarity should contribute to further promoting the sustainable economic development in the Parties, by making use of their respective economic strengths through bilateral trade and investment activities;
Realizing the differences between the Parties in terms of their level of economic development; Seeking to create a clearly established and secured trade and investment framework through mutually advantageous rules to govern trade and investment between the Parties;
Further seeking to enhance the competitiveness and supply capacity of the economies of the Parties, make their markets more efficient and vibrant, ensure predictable commercial environment for further expansion of trade and investment between them, and contribute to further economic efficiency and growth of the Parties;
Noting the important roles of private sectors for further enhancing commercial and economic relations between the Parties and believing that this Agreement will create new trade and investment opportunities for such private sectors;
Believing that the implementation of this Agreement will contribute to creating new and better employment opportunities through human resource development and thus will improve living standard, including consumer welfares, of the peoples of the Parties;
Reaffirming the view that this Agreement will not only contribute to strengthening the existing political and economic ties between the Parties but also become one of the significant steps in building Japan-Mongolia "Strategic Partnership";
Recalling Article XXIV of the GATT 1994 and Article V of the GATS;

Convinced that this Agreement would open a new era for the relationship between the Parties; and Determined to establish a legal framework for strengthening the economic partnership between the Parties;

HAVE AGREED as follows:

Body

Chapter 1. General Provisions

Article 1.1. Objective

The objective of this Agreement is to create a new economic dynamism between the Parties by means of the following, taking into account the stage of development and economic needs of the Parties:
(a) liberalizing and facilitating trade in goods and services between the Parties;
(b) facilitating movement of natural persons between the Parties;
(c) increasing investment opportunities and strengthening protection for investments and investment activities in the Parties;
(d) enhancing protection of intellectual property;
(e) promoting cooperation and coordination for the effective enforcement of competition laws in each Party; (f) establishing a framework for further reinforcing, broadening and deepening bilateral cooperation in all fields relevant to trade and investment and improvement of the business environment; and
(g) creating effective procedures for the implementation and operation of this Agreement and for the prevention and resolution of disputes.

Article 1.2. General Definitions

For the purposes of this Agreement, unless otherwise specified:
(a) the term "Agreement on Customs Valuation" means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement;
(b) the term "Area" means:
(i) for Japan, the territory of Japan, and the exclusive economic zone and the continental shelf with respect to which Japan exercises sovereign rights or jurisdiction in accordance with international law; and
(ii) for Mongolia, the territory of Mongolia; Note: Nothing in this subparagraph shall affect the rights and obligations of the Parties under international law, including those under the UNCLOS.
(c) the term "commercial presence" means any type of business or professional establishment, including through:
(i) the constitution, acquisition or maintenance of a juridical person; or
(ii) the creation or maintenance of a branch or a representative office, within the Area of a Party for the purposes of supplying a service;
(d) the term "customs authority" means the authority that, according to the legislation of each Party or a non-Party, is responsible for the administration and enforcement of customs laws and regulations:
(i) for Japan, the Ministry of Finance, or its successor; and
(ii) for Mongolia, the Customs General Administration, or its successor;
(e) the term "days" means calendar days, including weekends and holidays;
(f) the term "enterprise" means any juridical person or any other entity duly constituted or organized under the applicable laws and regulations, whether or not for profit, and whether private or government owned or controlled, including any corporation, trust, partnership, sole proprietorship, joint venture, association, organization or company;
(g) the term "enterprise of a Party" means an enterprise constituted or organized under the applicable laws and regulations of that Party;
(h) the term "GATS" means the General Agreement on Trade in Services in Annex 1B to the WTO Agreement; (i) the term "GATT 1994" means the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement. For the purposes of this Agreement, references to articles in the GATT 1994 include the interpretative notes;
(j) the term "Harmonized System" or "HS" means the Harmonized Commodity Description and Coding System set out in the Annex to the International Convention on the Harmonized Commodity Description and Coding System, and adopted and implemented by the Parties in their respective laws;
(k) the term "investment" means every kind of asset owned or controlled, directly or indirectly, by an investor, including:
(i) an enterprise and a branch of an enterprise;
(ii) shares, stocks or other forms of equity participation in an enterprise, including rights derived therefrom; (iii) bonds, debentures, loans and other forms of debt, including rights derived therefrom;
(iv) rights under contracts, including turnkey, construction, management, production or revenue-sharing contracts;
(v) claims to money and to any performance under contract having a financial value;
(vi) intellectual property; Note: Intellectual property means that set out in Article 12.2.
(vii) rights conferred pursuant to laws and regulations or contracts such as concessions, licenses, authorizations and permits, including, but not limited to, those for the supply of financial services, the supply of telecommunications services, the production of nuclear energy and the exploration and exploitation of natural resources; and
(viii) any other tangible and intangible, movable and immovable property, and any related property rights, such as leases, mortgages, liens and pledges; Note: An investment includes the amount yielded by an investment, in particular, profit, interest, capital gains, dividends, royalties and fees. A change in the form in which assets are invested does not affect their character as an investment.
(l) the term "investor of a Party" means:
(i) a natural person who is a national of a Party under the law of the Party; or
(ii) an enterprise of that Party, that seeks to make, is making or has made investments in the Area of the other Party;
(m) the term "juridical person" means any legal entity duly constituted or otherwise organized under applicable law, whether for profit or otherwise, and whether private or government owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;
(n) a juridical person is:
(i) "owned" by persons if more than 50 percent of the equity interest in it is beneficially owned by the persons; and
(ii) "controlled" by persons if the persons have the power to name a majority of its directors or otherwise to legally direct its actions;
(o) the term "originating good" means a good which qualifies as an originating good under the provisions of Chapter 3;
(p) the term "Parties" means Japan and Mongolia and the term "Party" means either Japan or Mongolia;
(q) the term "person" means a natural person or an enterprise/juridical person, as the case may be;
(r) the term "service supplier" means any person that supplies or seeks to supply a service; Note: Where the service is not supplied or sought to be supplied directly by a juridical person but through other forms of commercial presence such as a branch or a representative office, the service supplier (i.e. the juridical person) shall, nonetheless, through such commercial presence be accorded the treatment provided for service suppliers under Chapter 7. Such treatment shall be extended to the commercial presence through which the service is supplied or sought to be supplied and need not be extended to any other parts of the service supplier located outside the Area of a Party where the service is supplied or sought to be supplied.
(s) the term "SPS Agreement" means the Agreement on the Application of Sanitary and Phytosanitary Measures in Annex 1A to the WTO Agreement;
(t) the term "state enterprise" means a juridical person owned or controlled by a Party;
(u) the term "TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property Rights in Annex 1C to the WTO Agreement;
(v) the term "UNCLOS" means the United Nations Convention on the Law of the Sea, done at Montego Bay, December 10, 1982; and
(w) the term "WTO Agreement" means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh, April 15, 1994.

Article 1.3. Transparency

1. Each Party shall promptly publish, or otherwise make publicly available, its laws, regulations and judicial decisions of general application as well as international agreements to which the Party is a party, with respect to any matter covered by this Agreement.
2. Each Party shall make easily available to the public the names and addresses of the competent authorities responsible for the laws and regulations referred to in paragraph 1.
3. Each Party shall, upon request of the other Party, within a reasonable period of time, respond to specific questions from, and provide information to, the other Party with respect to matters referred to in paragraph 1, in the English language to the extent possible.
4. When introducing or changing its laws or regulations that significantly affect the implementation and operation of this Agreement, each Party shall endeavor to provide, except in emergency situations and to the extent covered by its domestic laws, a reasonable interval between the time when such laws or regulations are published or made publicly available and the time when they enter into force.

Article 1.4. Public Comment Procedures

Each Party shall, in accordance with its laws and regulations and to the extent practicable, maintain public comment procedures with respect to any matter covered by this Agreement.

Article 1.5. Administrative Procedures

1. Upon receiving an application submitted by a person who seeks an administrative decision which pertains to or affects the implementation and operation of this Agreement, the competent authorities of a Party shall, in accordance with the laws and regulations of the Party:
(a) inform the applicant of the decision within a reasonable period of time after the submission of the application considered complete in accordance with the laws and regulations of the Party, taking into account the established standard period of time referred to in paragraph 3; and
(b) provide, within a reasonable period of time, information concerning the status of the application, upon request of the applicant.
2. The competent authorities of a Party shall, in accordance with the laws and regulations of the Party, establish criteria for reviewing the application referred to in paragraph 1. The competent authorities shall make such criteria:
(a) as specific as possible; and
(b) publicly available except when it would extraordinarily raise administrative difficulties for the Party.
3. For the purposes of reviewing the applications referred to in paragraph 1, the competent authorities of a Party shall, in accordance with the laws and regulations of the Party:
(a) endeavor to establish standard periods of time between the receipt of the applications and the administrative decisions taken in response to the applications; and
(b) make publicly available such periods of time, if established.
4. The competent authorities of a Party shall endeavor to, in accordance with the laws and regulations of the Party, prior to any final decision which imposes obligations on or restricts legal rights of a person, provide that person with:
(a) a reasonable notice, including a description of the nature of the measure, specific provisions upon which such measure will be based, and the facts which may be a cause of taking such measure; and
(b) a reasonable opportunity to present facts and arguments in support of position of such person, provided that time, nature of the measure and public interest permit.

Article 1.6. Review and Appeal

1. Each Party shall maintain courts or procedures for the purpose of prompt review and, where warranted, correction of administrative actions regarding matters covered by this Agreement. Such courts or procedures shall be impartial and independent of the authorities entrusted with the administrative enforcement of such actions.
2. Each Party shall ensure that the parties in any such courts or procedures are provided with the right to:
(a) a reasonable opportunity to support or defend their respective positions; and
(b) a decision based on the evidence and submissions of record.
3. Each Party shall ensure, subject to appeal or further review as provided in its laws and regulations, that such decision is implemented by the relevant authorities with respect to the administrative action at issue.

Article 1.7. Measures Against Corruption

Each Party shall, in accordance with its laws and regulations, take appropriate measures to prevent and combat corruption of its public officials regarding matters covered by this Agreement.

Article 1.8. Confidential Information

1. Each Party shall, in accordance with its laws and regulations, maintain the confidentiality of information provided in confidence by the other Party in accordance with this Agreement.
2. Unless otherwise provided for in this Agreement, nothing in this Agreement shall require a Party to provide confidential information, the disclosure of which would impede the enforcement of its laws and regulations, or otherwise be contrary to the public interest, or which would prejudice legitimate commercial interests of particular enterprises, public or private.

Article 1.9. Taxation

1. Unless otherwise provided for in this Agreement, the provisions of this Agreement shall not apply to any taxation measures.
2. Nothing in this Agreement shall affect the rights and obligations of either Party under any tax convention. In the event of any inconsistency between this Agreement and any such convention, that convention shall prevail to the extent of the inconsistency.
3. Articles 1.3 and 1.8 shall apply to taxation measures, to the extent that the provisions of this Agreement are applicable to such taxation measures.

Article 1.10. Exceptions

1. For the purposes of this Agreement except Chapters 7, 8 and 12, Articles XX and XXI of the GATT 1994 are incorporated into and form part of this Agreement, mutatis mutandis.
2. For the purposes of Chapters 7, 8, 9 and 10, Articles XIV and XIV bis of the GATS are incorporated into and form part of this Agreement, mutatis mutandis.
3. The Parties may consult with each other on issues related to the situation where:
(a) the export earnings of a Party the economy of which depend on exports of a small number of primary commodities may be seriously reduced by a decline in the sales or the world prices of such commodities; or

(b) promoting the establishment of a particular industry of a Party may be required with a view to raising the general standard of living of its people.

Note: For the purposes of this Article, it is understood that subparagraph (b) of Article XX of the GATT 1994 and subparagraph (b) of Article XIV of the GATS include environmental measures necessary to protect human, animal or plant life or health, and that subparagraph (g) of Article XX of the GATT 1994 applies to measures related to the conservation of living and non-living exhaustible natural resources.

Article 1.11. Relation to other Agreements

1. The Parties reaffirm their rights and obligations under the WTO Agreement or any other agreements to which both Parties are party.
2. In the event of any inconsistency between this Agreement and the WTO Agreement, the WTO Agreement shall prevail to the extent of the inconsistency. 3. In the event of any inconsistency between this Agreement and any agreement other than the WTO Agreement to which both Parties are party, the Parties shall immediately consult with each other with a view to finding a mutually satisfactory solution, taking into consideration general principles of international law.

Article 1.12. Implementing Agreement

The Governments of the Parties shall conclude a separate agreement setting forth the details and procedures for the implementation of this Agreement, which thereby shall be complementary to this Agreement (hereinafter referred to as "Implementing Agreement").

Article 1.13. Joint Committee

1. The Parties hereby establish a Joint Committee under this Agreement.
2. The functions of the Joint Committee shall be:
(a) reviewing and monitoring the implementation and operation of this Agreement and, when necessary, making appropriate recommendations to the Parties;
(b) considering and recommending to the Parties any amendments to this Agreement;
(c) supervising and coordinating the work of all Sub- Committees established under this Agreement;
(d) adopting:
(i) the Operational Procedures for Trade in Goods and the Operational Procedures for Rules of Origin referred to in Article 2.20 and Article 3.26, respectively; and
(ii) any necessary decisions; and
(e) carrying out other functions as the Parties may agree.
3. The Joint Committee:
(a) shall be composed of representatives of the Governments of the Parties;
(b) may establish other Sub-Committees than those provided for in Article 1.14; and
(c) may delegate its responsibilities to Sub- Committees.
4. The Joint Committee shall establish its rules and procedures. 5. The Joint Committee shall hold the first meeting on the date of entry into force of this Agreement, and thereafter, meet at such times and venues or by means, as may be agreed by the Parties.

Article 1.14. Sub-committees

1. The following Sub-Committees shall be established on the date of entry into force of this Agreement:
(a) Sub-Committee on Trade in Goods, as provided for in Article 2.19;
(b) Sub-Committee on Rules of Origin, as provided for in Article 3.25;
(c) Sub-Committee on Customs Procedures and Trade Facilitation, as provided for in Article 4.8;
(d) Sub-Committee on Sanitary and Phytosanitary Measures, as provided for in Article 5.6;
(e) Sub-Committee on Technical Regulations, Standards and Conformity Assessment Procedures, as provided for in Article 6.9;
(f) Sub-Committee on Trade in Services, as provided for in Article 7.16;
(g) Sub-Committee on Movement of Natural Persons, as provided for in Article 8.6;
(h) Sub-Committee on Electronic Commerce, as provided for in Article 9.13;
(i) Sub-Committee on Investment, as provided for in Article 10.18;
(j) Sub-Committee on Intellectual Property, as provided for in Article 12.18;
(k) Sub-Committee on Government Procurement, as provided for in Article 13.5;
(l) Sub-Committee on Improvement of the Business Environment, as provided for in Article 14.2; and
(m) Sub-Committee on Cooperation, as provided for in Article 15.4.
2. The Sub-Committees shall carry out the functions specified in the corresponding Articles referred to in paragraph 1.

Article 1.15. Communications

Each Party shall designate a contact point to facilitate communications between the Parties on any matter related to this Agreement.

Chapter 2. Trade In Goods

Article 2.1. Definitions

For the purposes of this Chapter:
(a) the term "Agreement on Agriculture" means the Agreement on Agriculture in Annex 1A to the WTO Agreement;
(b) the term "Agreement on Anti-Dumping" means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement;
(c) the term "Agreement on Safeguards" means the Agreement on Safeguards in Annex 1A to the WTO Agreement;
(d) the term "Agreement on Subsidies and Countervailing Measures" means the Agreement on Subsidies and Countervailing Measures in Annex 1A to the WTO Agreement;
(e) the term "bilateral safeguard measure" means a bilateral safeguard measure provided for in paragraph 2 of Article 2.8;
(f) the term "customs duty" means any customs or import duty imposed in connection with the importation of a good, but does not include any:
(i) charge equivalent to an internal tax imposed consistently with the provisions of paragraph 2 of Article II and paragraph 2 of Article III of the GATT 1994;
(ii) anti-dumping or countervailing duty applied pursuant to a Party's law and applied consistently with the provisions of Article VI of the GATT 1994, the Agreement on Anti- Dumping and the Agreement on Subsidies and Countervailing Measures; or
(iii) fees or other charges commensurate with the cost of services rendered;
(g) the term "customs value of goods" means the value of goods for the purposes of levying ad valorem customs duties on imported goods;
(h) the term "domestic industry" means the producers as a whole of the like or directly competitive goods operating in a Party, or those whose collective output of the like or directly competitive goods constitutes a major proportion of the total domestic production of those goods;
(i) the term "provisional bilateral safeguard measure" means a provisional bilateral safeguard measure provided for in paragraph 1 of Article 2.13;
(j) the term "serious injury" means a significant overall impairment in the position of a domestic industry; and (k) the term "threat of serious injury" means serious injury that, on the basis of facts and not merely on allegation, conjecture or remote possibility, is clearly imminent.

Article 2.2. Classification of Goods

The classification of goods in trade between the Parties shall be in conformity with the Harmonized System.

Article 2.3. National Treatment

Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of the GATT 1994, and to this end Article III of the GATT 1994 is incorporated into and forms part of this Agreement, mutatis mutandi.

Article 2.4. Elimination or Reduction of Customs Duties

1. Unless otherwise provided for in this Agreement, each Party shall eliminate or reduce its customs duties on originating goods of the other Party in accordance with its Schedule in Annex 1.
2. Upon request of either Party, the Parties shall negotiate on issues such as improving market access for originating goods designated for negotiation in the Schedules in Annex 1, in accordance with the terms and conditions set out in such Schedules.
3. In accordance with subparagraph 1(b) of Article II of the GATT 1994, the goods traded between the Parties shall be exempt from other duties or charges of any kind imposed on or in connection with the importation. 4. Nothing in this Article shall prevent a Party from imposing, at any time, a charge equivalent to an internal tax, any anti-dumping or countervailing duty, or fees or other charges referred to in subparagraphs (f)(i) through (iii) of Article 2.1, respectively, on the importation of any good of the other Party.
5. If, as a result of the elimination or reduction of its customs duty on a particular good on a most-favored-nation basis, the most-favored-nation applied rate for the good becomes equal to, or lower than, the rate of customs duty to be applied in accordance with paragraph 1 on the originating good which is classified under the same tariff line as that particular good, each Party shall notify the other Party of such elimination or reduction without delay.
6. In cases where its most-favored-nation applied rate of customs duty on a particular good becomes lower than the rate of customs duty to be applied in accordance with paragraph 1 on the originating good which is classified under the same tariff line as that particular good, each Party shall apply the lower rate with respect to that originating good.

Article 2.5. Customs Valuation

For the purposes of determining the customs value of goods traded between the Parties, the provisions of Part I of the Agreement on Customs Valuation shall apply mutatis mutandi.

Article 2.6. Export Subsidies

Neither Party shall introduce or maintain any export subsidies, which are inconsistent with its obligations under the WTO Agreement, on any agricultural good, which is listed in Annex 1 to the Agreement on Agriculture.

Article 2.7. Import and Export Restrictions

1. Neither Party shall introduce or maintain any prohibition or restriction other than customs duties on the importation of any good of the other Party or on the exportation or sale for export of any good destined to the other Party, which is inconsistent with its obligations under the relevant provisions of the WTO Agreement.
2. In the case that a Party introduces a prohibition or restriction other than customs duties taken consistently with the provisions of the WTO Agreement with respect to the importation from, or the exportation to, the other Party of a good upon which the Parties agree, the former Party shall make available, and endeavor to notify, relevant information to the other Party, prior to the introduction of such prohibition or restriction, or as soon as possible thereafter, in a manner consistent with the laws and regulations of the former Party. This paragraph shall apply unless the sharing of such information is considered by the former Party as prejudicial to public interest.

Note: A Party may comply with this paragraph by providing the relevant information to the other Party through the relevant procedures under the WTO Agreement. Safeguard Measures

Article 2.8. Application of Bilateral Safeguard Measures

1. Subject to the provisions of this Section, a Party may apply a bilateral safeguard measure, to the minimum extent necessary to prevent or remedy the serious injury to its domestic industry and to facilitate adjustment thereof, if an originating good of the other Party, as a result of the elimination or reduction of a customs duty in accordance with Article 2.4, is being imported into the former Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions that the imports of that originating good constitute cause of serious injury, or threat of serious injury, to a domestic industry of the former Party.
2. A Party may, as a bilateral safeguard measure:
(a) suspend the further reduction of any rate of customs duty on the originating good provided for in this Chapter; or
(b) increase the rate of customs duty on the originating good to a level not to exceed the lesser of:
(i) the most-favored-nation applied rate of customs duty in effect on the day when the bilateral safeguard measure is applied; and
(ii) the most-favored-nation applied rate of customs duty in effect on the day immediately preceding the date of entry into force of this Agreement.

Article 2.9. Conditions and Limitations

1. No bilateral safeguard measure shall be maintained except to the extent and for such period of time as may be necessary to prevent or remedy serious injury and to facilitate adjustment, provided that such period of time shall not exceed a period of three years. However, in highly exceptional circumstances, a bilateral safeguard measure may be extended, provided that the total duration of the bilateral safeguard measure, including such extensions, shall not exceed six years. In order to facilitate adjustment in a situation where the expected duration of a bilateral safeguard measure is over one year, the Party maintaining the bilateral safeguard measure shall progressively liberalize the bilateral safeguard measure at regular intervals during the period of application.
2. No bilateral safeguard measure shall be applied again to the import of a particular originating good which has been subject to such a bilateral safeguard measure, for a period of time equal to the duration of the previous bilateral safeguard measure or one year, whichever is longer.
3. Upon the termination of a bilateral safeguard measure, the rate of customs duty for the originating good subject to the measure shall be the rate which would have been in effect if the bilateral safeguard measure had never been applied.
4. A bilateral safeguard measure shall not be applied against an originating good of the exporting Party as long as its share of imports of the good concerned in the importing Party does not exceed three percent.
5. Each Party shall adopt or maintain equitable, timely, transparent and effective procedures relating to bilateral safeguard measures.

Article 2.10. Investigation

1. A Party may apply a bilateral safeguard measure only after an investigation has been carried out by the competent authorities of that Party in accordance with the same procedures as those provided for in Article 3 and paragraph 2 of Article 4 of the Agreement on Safeguards.
2. The investigation referred to in paragraph 1 shall, except in special circumstances, be completed within one year, and in no case more than 18 months, following its date of initiation.

Article 2.11. Notification and Consultations

1. A Party shall immediately make a written notice to the other Party upon:
(a) initiating an investigation referred to in paragraph 1 of Article 2.10 related to serious injury, or threat of serious injury, and the reasons therefor; and
(b) taking a decision to apply or extend a bilateral safeguard measure.
2. The Party making the written notice referred to in paragraph 1 shall provide the other Party with all pertinent information, which shall include:
(a) in the written notice referred to in subparagraph 1(a), the reason for the initiation of the investigation, a precise description of the originating good subject to the investigation and its subheading under the Harmonized System, the period subject to the investigation and the date of initiation of the investigation; and (b) in the written notice referred to in subparagraph 1(b), evidence of serious injury or threat of serious injury caused by the increased imports of the originating good, a precise description of the originating good subject to the proposed bilateral safeguard measure and its subheading under the Harmonized System, a precise description of the proposed bilateral safeguard measure, and the proposed date of the introduction and expected duration of the bilateral safeguard measure.
3. A Party proposing to apply or extend a bilateral safeguard measure shall provide adequate opportunity for prior consultations with the other Party with a view to reviewing the information arising from the investigation referred to in paragraph 1 of Article 2.10, exchanging views on the bilateral safeguard measure and reaching an agreement on compensation set out in Article 2.12.

Article 2.12. Compensation

1. A Party proposing to apply or extend a bilateral safeguard measure may agree on adequate means of trade compensation in the form of concessions of customs duties whose value is substantially equivalent to that of the additional customs duties expected to result from the bilateral safeguard measure.
2. If the Parties are unable to agree on the compensation within 30 days after the commencement of the consultations in accordance with paragraph 3 of Article 2.11, the Party to whose originating good the bilateral safeguard measure is applied shall be free to suspend the application of concessions of customs duties under this Agreement, which are substantially equivalent to the bilateral safeguard measure. The Party exercising the right of suspension may suspend the application of concessions of customs duties only for the minimum period necessary to achieve the substantially equivalent effects and only while the bilateral safeguard measure is maintained.

Article 2.13. Provisional Bilateral Safeguard Measures

1. In critical circumstances, where delay would cause damage which it would be difficult to repair, a Party may apply a provisional bilateral safeguard measure, which shall take the form of the measure set out in subparagraph 2(a) or 2(b) of Article 2.8, pursuant to a preliminary determination that there is clear evidence that increased imports of an originating good of the other Party have caused or are threatening to cause serious injury to a domestic industry of the former Party.
2. A Party shall make a written notice to the other Party prior to applying a provisional bilateral safeguard measure. Consultations between the Parties on the application of the provisional bilateral safeguard measure shall be initiated immediately after the provisional bilateral safeguard measure is applied.
3. The duration of a provisional bilateral safeguard measure shall not exceed 200 days. During that period, the pertinent requirements of Article 2.10 shall be met. The duration of the provisional bilateral safeguard measure shall be counted as a part of the period referred to in paragraph 1 of Article 2.9. 4. Paragraphs 3 through 5 of Article 2.9 shall apply, mutatis mutandi, to a provisional bilateral safeguard measure. The customs duty imposed as a result of the provisional bilateral safeguard measure shall be refunded if the subsequent investigation referred to in paragraph 1 of Article 2.10 does not determine that increased imports of an originating good of the other Party have caused or threatened to cause serious injury to a domestic industry.

Article 2.14. Relation to Safeguard Measures Under the Wto Agreement

1. Nothing in this Section shall prevent a Party from applying a safeguard measure to an originating good of the other Party in accordance with:
(a) Article XIX of the GATT 1994 and the Agreement on Safeguards; or
(b) Article 5 of the Agreement on Agriculture.
2. A Party applying a safeguard measure to the importation of an originating good of the other Party in accordance with Article XIX of the GATT 1994 and the Agreement on Safeguards, or Article 5 of the Agreement on Agriculture, shall not apply at the same time a bilateral safeguard measure under this Section to that importation.
3. In the case that a Party has applied a bilateral safeguard measure under this Section to the importation of an originating good of the other Party prior to the application of a safeguard measure in accordance with Article XIX of the GATT 1994 and the Agreement on Safeguards, or Article 5 of the Agreement on Agriculture, the duration of the latter safeguard measure shall be counted as a part of the total duration of the bilateral safeguard measure. The Party may resume the application of the bilateral safeguard measure to that importation upon the termination of the latter safeguard measure up to the remaining period of the bilateral safeguard measure.

Article 2.15. Communications

A written notice referred to in paragraph 1 of Article 2.11 and paragraph 2 of Article 2.13 and any other communication between the Parties in accordance with this Section shall be made in the English language.

Article 2.16. Review

The Parties shall review the provisions of this Section, if necessary, 10 years after the date of entry into force of this Agreement. Other Provisions

Article 2.17. Anti-dumping and Countervailing Measures

Nothing in this Chapter shall be construed to prevent a Party from taking any measure in accordance with the provisions of Article VI of the GATT 1994, the Agreement on Anti-Dumping and the Agreement on Subsidies and Countervailing Measures.

Article 2.18. Measures to Safeguard the Balance of Payments

1. Nothing in this Chapter shall be construed to prevent a Party from taking any measure for balance-of-payments purposes. A Party taking such measure shall do so in accordance with the conditions established under Article XII of the GATT 1994 and the Understanding on the Balance- of-Payments Provisions of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement.
2. Nothing in this Chapter shall preclude the use by a Party of exchange controls or exchange restrictions in accordance with the Articles of Agreement of the International Monetary Fund.

Article 2.19. Sub-committee on Trade In Goods

1. For the purposes of the effective implementation and operation of this Chapter, the Parties hereby establish a Sub-Committee on Trade in Goods (hereinafter referred to in this Article as "the Sub-Committee"). 2. The functions of the Sub-Committee shall be:
(a) reviewing and monitoring the implementation and operation of this Chapter;
(b) considering any other matter related to this Chapter as the Parties may agree;
(c) reviewing and making appropriate recommendations, as necessary, to the Joint Committee on the Operational Procedures for Trade in Goods referred to in Article 2.20;
(d) reporting the findings of the Sub-Committee to the Joint Committee; and
(e) carrying out other functions as may be delegated by the Joint Committee.
3. The Sub-Committee shall be composed of representatives of the Governments of the Parties.
4. The Sub-Committee shall hold meetings at such times and venues or by means, as may be agreed by the Parties.

Article 2.20. Operational Procedures for Trade In Goods

Upon the date of entry into force of this Agreement, the Joint Committee shall adopt the Operational Procedures for Trade in Goods that provide detailed regulations pursuant to which the relevant authorities of the Parties shall implement their functions under this Chapter.

Article 2.21. Cooperation with Respect to Exports

The Parties shall, in accordance with the provisions of Chapter 15, cooperate with each other in the field of used four-wheeled motor vehicles exported from the exporting Party.

Chapter 3. Rules of Origin

Article 3.1. Definitions

For the purposes of this Chapter:
(a) the term "competent governmental authority" means the authority that, according to the legislation of each Party, is responsible for the issuing of a Certificate of Origin or for the designation of certification entities or bodies;
(b) the term "exporter" means a person located in an exporting Party who exports a good from the exporting Party;
(c) the term "factory ships of the Party" or "vessels of the Party" respectively means factory ships or vessels: (i) which are registered in the Party;
(ii) which sail under the flag of the Party; and
(iii) which meet one of the following conditions:
(A) they are at least 50 percent owned by nationals of the Parties; or
(B) they are owned by a juridical person which has its head office and its principal place of business in either Party and which does not own any vessel or ship registered in a non-Party;
(d) the term "fungible originating goods of a Party" or "fungible originating materials of a Party" respectively means originating goods or materials of a Party that are interchangeable for commercial purposes, whose properties are essentially identical;
(e) the term "Generally Accepted Accounting Principles" means the recognized consensus or substantial authoritative support within a Party at a particular time as to which economic resources and obligations should be recorded as assets and liabilities, which changes in assets and liabilities should be recorded, how the assets and liabilities and changes in them should be measured, what information should be disclosed and how it should be disclosed, and which financial statements should be prepared. These standards may be broad guidelines of general application as well as detailed practices and procedures;
(f) the term "importer" means a person who imports a good into the importing Party;
(g) the term "indirect materials" means goods used in the production, testing or inspection of another good but not physically incorporated into the good, or goods used in the maintenance of buildings or the operation of equipment associated with the production of another good, including:
(i) fuel and energy;
(ii) tools, dies and molds;
(iii) spare parts and goods used in the maintenance of equipment and buildings;
(iv) lubricants, greases, compounding materials and other goods used in production or used to operate equipment and buildings;
(v) gloves, glasses, footwear, clothing, safety equipment and supplies;
(vi) equipment, devices and supplies used for testing or inspecting the good;
(vii) catalysts and solvents; and
(viii) any other goods that are not incorporated into another good but whose use in the production of the good can reasonably be demonstrated to be a part of that production;
(h) the term "material" means a good that is used in the production of another good;
(i) the term "non-originating material" means a material which does not qualify as originating under this Chapter;
(j) the term "originating material" means a material which qualifies as originating under this Chapter;
(k) the term "packing materials and containers for transportation and shipment" means goods that are used to protect a good during transportation, other than packaging materials and containers for retail sale referred to in Article 3.13;
(l) the term "preferential tariff treatment" means the rate of customs duties applicable to an originating good of the exporting Party in accordance with paragraph 1 of Article 2.4;
(m) the term "producer" means a person who engages in the production of goods or materials; and
(n) the term "production" means a method of obtaining goods including manufacturing, assembling, processing, raising, growing, breeding, mining, extracting, harvesting, fishing, trapping, gathering, collecting, hunting and capturing.

Article 3.2. Originating Goods

Unless otherwise provided for in this Chapter, a good shall qualify as an originating good of a Party where:
(a) the good is wholly obtained or produced entirely in the Party, as defined in Article 3.3;
(b) the good is produced entirely in the Party exclusively from originating materials of the Party; or
(c) the good satisfies the product specific rules (change in tariff classification, qualifying value content or specific manufacturing or processing operation) set out in Annex 2, as well as all other applicable requirements of this Chapter, when the good is produced entirely in the Party using non-originating materials.

Article 3.3. Wholly Obtained Goods

For the purposes of subparagraph (a) of Article 3.2, the following goods shall be considered as being wholly obtained or produced entirely in a Party:
(a) live animals born and raised in the Party;
(b) animals obtained by hunting, trapping, fishing, gathering or capturing in the Party;
(c) goods obtained from live animals in the Party;
(d) plants and plant products harvested, picked or gathered in the Party;
(e) minerals and other naturally occurring substances, not included in subparagraphs (a) through (d), extracted or taken in the Party;
(f) goods of sea-fishing and other goods taken by vessels of the Party from the sea outside the territorial seas of the Parties;
(g) goods produced on board factory ships of the Party outside the territorial seas of the Parties from the goods referred to in subparagraph (f);
(h) goods taken from the seabed or subsoil thereof outside the territorial sea of the Party, provided that the Party has rights to exploit such seabed or subsoil in accordance with the provisions of the UNCLOS;
(i) articles collected in the Party which can no longer perform their original purpose in the Party nor are capable of being restored or repaired and which are fit only for disposal or for the recovery of parts or raw materials;
(j) scrap and waste derived from manufacturing or processing operations or from consumption in the Party and fit only for disposal or for the recovery of raw materials;
(k) parts or raw materials recovered in the Party from articles which can no longer perform their original purpose nor are capable of being restored or repaired; and
(l) goods obtained or produced in the Party exclusively from the goods referred to in subparagraphs (a) through (k).

Article 3.4. Qualifying Value Content

1. For the purposes of subparagraph (c) of Article 3.2, the qualifying value content of a good shall be calculated on the basis of one or the other of the following methods:
(a) Method based on value of non-originating materials ("Build-down method")
                 F.O.B. – V.N.M.
Q.V.C. = ----------------------------- x 100
                    F.O.B.

(b) Method based on value of originating materials ("Build-up method")
V.O.M. + Direct Labor Cost + Direct Overhead Cost + Profit
Q.V.C. = -------------------------------- x 100
                    F.O.B.
Where:
Q.V.C. is the qualifying value content of a good, expressed as a percentage;
F.O.B. is, except as provided for in paragraph 2, the free- on-board value of the good payable by the buyer of the good to the seller of the good, regardless of the mode of shipment, not including any internal excise taxes reduced, exempted or repaid when the good is exported;
V.N.M. is the value of non-originating materials used in the production of the good; and V.O.M. is the value of originating materials used in the production of the good.

Note: For the purposes of calculating the qualifying value content of a good, the Generally Accepted Accounting Principles in the exporting Party shall apply.

2. F.O.B. referred to in paragraph 1 shall be the value:
(a) adjusted to the first ascertainable price paid for a good from the buyer to the producer of the good, if there is free-on-board value of the good, but it is unknown and cannot be ascertained; or
(b) determined in accordance with Articles 1 through 8 of the Agreement on Customs Valuation, if there is no free-on-board value of a good.

3. For the purposes of calculating the qualifying value content of a good in accordance with paragraph 1, the value of material used in the production of the good in a Party:
(a) shall be determined in accordance with the Agreement on Customs Valuation, and shall include freight, insurance where appropriate, packing and all the other costs incurred in transporting the material to the importation port in the Party where the producer of the good is located; or
(b) if such value is unknown and cannot be ascertained, shall be the first ascertainable price paid for the material in the Party, but may exclude all the costs incurred in the Party in transporting the material from the warehouse of the supplier of the material to the place where the producer is located such as freight, insurance and packing as well as any other known and ascertainable cost incurred in the Party.

4. For the purposes of calculating the qualifying value content of a good to determine whether the good qualifies as an originating good of a Party:
(a) V.N.M. of the good under subparagraph 1(a) shall not include the value of non-originating materials used in the production of originating materials of the Party which are used in the production of the good; and
(b) V.O.M. of the good under subparagraph 1(b) shall include the value of non-originating materials used in the production of originating materials of the Party which are used in the production of the good.

5. For the purposes of subparagraph 2(b) or 3(a), in applying the Agreement on Customs Valuation to determine the value of a good or a material, the Agreement on Customs Valuation shall apply mutatis mutandi to domestic transactions or to the cases where there is no transaction of the good or the material.

Article 3.5. Accumulation

For the purposes of determining whether a good qualifies as an originating good of a Party:
(a) an originating good of the other Party which is used as a material in the production of the good in the former Party may be considered as an originating material of the former Party;
(b) the production in the other Party may be considered as that in the former Party; and
(c) the production carried out at different stages by one or more producers within the Party or in the other Party may be taken into account, when the good is produced using non-originating materials, provided that such good has undergone its last production process in the exporting Party and such production process goes beyond the operations provided for in Article 3.7.

Article 3.6. De Minimis

1. For the application of the product specific rules set out in Annex 2, non-originating materials used in the production of a good that do not satisfy an applicable rule for the good shall be disregarded, provided that the totality of such materials does not exceed specific percentage in value, weight or volume of the good and such percentage is set out in the applicable product specific rule for the good.
2. Paragraph 1 shall not apply to a non-originating material used in the production of a good provided for in Chapters 1 through 24 of the Harmonized System, except where such non-originating material is provided for in a subheading which is different from that of the good for which the origin is being determined under this Article.

Article 3.7. Non-qualifying Operations

1. A good shall not be considered as an originating good of a Party merely by reason of:
(a) operations to ensure the preservation of products in good condition during transport and storage (such as drying, freezing, keeping in brine) and other similar operations;
(b) changes of packaging and breaking-up and assembly of packages;
(c) disassembly;
(d) placing in bottles, cases, boxes and other simple packaging operations;
(e) collection of parts and components classified as a good in accordance with Rule 2(a) of the General Rules for the Interpretation of the Harmonized System;
(f) mere making-up of sets of articles; or
(g) any combination of operations referred to in subparagraphs (a) through (f).
2. Paragraph 1 shall prevail over the product specific rules set out in Annex 2.

Article 3.8. Consignment Criteria

1. An originating good of the other Party shall be deemed to meet the consignment criteria when it is transported:
(a) directly from the other Party; or
(b) through one or more non-Parties for the purpose of transit or temporary storage in warehouses in such non-Parties, provided that it does not undergo operations other than unloading, reloading and any other operation to preserve it in good condition.
2. If an originating good of the other Party does not meet the consignment criteria referred to in paragraph 1, the good shall not be considered as an originating good of the other Party.

Article 3.9. Unassembled or Disassembled Goods

1. Where a good satisfies the requirements of the relevant provisions of Articles 3.2 through 3.7 and is imported into a Party from the other Party in an unassembled or disassembled form but is classified as an assembled good in accordance with Rule 2(a) of the General Rules for the Interpretation of the Harmonized System, such a good shall be considered as an originating good of the other Party.
2. A good assembled in a Party from unassembled or disassembled materials, which were imported into the Party and classified as an assembled good in accordance with Rule 2(a) of the General Rules for the Interpretation of the Harmonized System, shall be considered as an originating good of the Party, provided that the good would have satisfied the applicable requirements of the relevant provisions of Articles 3.2 through 3.7 if each of the non- originating materials among the unassembled or disassembled materials had been imported into the Party separately and not as an unassembled or disassembled form.

Article 3.10. Fungible Goods and Materials

1. For the purposes of determining whether a good qualifies as an originating good of a Party, where fungible originating materials of the Party and fungible non- originating materials that are commingled in an inventory are used in the production of the good, the origin of the materials may be determined in accordance with an inventory management method under the Generally Accepted Accounting Principles in the Party.
2. Where fungible originating goods of a Party and fungible non-originating goods are commingled in an inventory and, prior to exportation, do not undergo any production process or any operation in the Party where they were commingled other than unloading, reloading and any other operation to preserve them in good condition, the origin of the good may be determined in accordance with an inventory management method under the Generally Accepted Accounting Principles in the Party.

Article 3.11. Indirect Materials

Indirect materials shall be, without regard to where they are produced, considered as originating materials of a Party where the good is produced.

Article 3.12. Accessories, Spare Parts and Tools

1. In determining whether all the non-originating materials used in the production of a good undergo the applicable change in tariff classification or a specific manufacturing or processing operation set out in Annex 2, accessories, spare parts or tools delivered with the good that form part of the good's standard accessories, spare parts or tools, shall be disregarded, provided that:
(a) the accessories, spare parts or tools are not invoiced separately from the good, without regard to whether they are separately described in the invoice; and
(b) the quantities and value of the accessories, spare parts or tools are customary for the good.
2. If a good is subject to a qualifying value content requirement, the value of the accessories, spare parts or tools shall be taken into account as the value of originating materials of a Party where the good is produced or non-originating materials, as the case may be, in calculating the qualifying value content of the good.

Article 3.13. Packaging Materials and Containers for Retail Sale

1. Packaging materials and containers for retail sale,which are classified with the good in accordance with Rule5 of the General Rules for the Interpretation of theHarmonized System, shall be disregarded in determining theorigin of the good, provided that:
(a) the good is wholly obtained or entirely produced as defined in subparagraph (a) of Article 3.2;
(b) the good is produced exclusively from originating materials, as defined in subparagraph (b) of Article 3.2; or
(c) the good has undergone the applicable change in tariff classification or a specific manufacturing or processing operation set out in Annex 2.
2. If a good is subject to a qualifying value content requirement, the value of packaging materials and containers for retail sale shall be taken into account as the value of originating materials of a Party where the good is produced or non-originating materials, as the case may be, in calculating the qualifying value content of the good.

Article 3.14. Packing Materials and Containers for Transportation and Shipment

Packing materials and containers for transportation and shipment of a good shall not be taken into account in determining the origin of the good.

Article 3.15. Claim for Preferential Tariff Treatment

1. The importing Party shall grant preferential tariff treatment in accordance with this Agreement to an originating good of the exporting Party on the basis of a Certificate of Origin.
2. Notwithstanding paragraph 1:
(a) the importing Party shall not require a Certificate of Origin from the importer for an importation of an originating good of the exporting Party whose aggregate customs value does not exceed 1,500 United States dollars or its equivalent amount in the importing Party's currency, or such higher amount as may be established by the importing Party, provided that the importation does not form part of importations that may reasonably be considered to have been made separately for the purpose of avoiding the requirement for a Certificate of Origin; and
(b) the importing Party may waive the requirement for a Certificate of Origin in accordance with its laws and regulations.
3. The importing Party may require, where appropriate, the importer to submit other evidence that the good qualifies as an originating good of the exporting Party.
4. Where an originating good of the exporting Party is imported through one or more non-Parties, the importing Party may require the importer who claims preferential tariff treatment for that good to submit:
(a) a copy of the through bill of lading; or
(b) a certificate or any other information given by the customs authorities of such non-Parties or other relevant entities, which evidences that the good has not undergone operations other than unloading, reloading and any other operation to preserve it in good condition in those non- Parties.

Article 3.16. Certificate of Origin

1. A Certificate of Origin referred to in paragraph 1 of Article 3.15 shall be issued by the competent governmental authority of the exporting Party upon request having been made by the exporter or its authorized agent. Such Certificate of Origin shall include minimum data specified in Annex 3.
2. For the purposes of this Article, the competent governmental authority of the exporting Party may designate other entities or bodies to be responsible for the issuance of Certificate of Origin, under the authorization given in accordance with the applicable laws and regulations of the exporting Party.
3. Where the competent governmental authority of the exporting Party designates other entities or bodies to carry out the issuance of Certificate of Origin, the exporting Party shall notify in writing the other Party of its designees.
4. For the purposes of this Chapter, upon the entry into force of this Agreement, the Parties shall establish each Party's format of Certificate of Origin in the English language in the Operational Procedures for Rules of Origin referred to in Article 3.26.
5. A Certificate of Origin shall be completed in the English language.
6. A Certificate of Origin shall be in a printed format or such other medium agreed upon by the Parties.
7. An issued Certificate of Origin shall be applicable to a single importation of originating goods of the exporting Party into the importing Party and be valid for 12 months from the date of issuance.
8. Where the exporter of a good is not the producer of the good in the exporting Party, the exporter may request a Certificate of Origin on the basis of:
(a) a declaration provided by the exporter to the competent governmental authority or its designees based on the information provided by the producer of the good to that exporter; or
(b) a declaration voluntarily provided by the producer of the good directly to the competent governmental authority or its designees by the request of the exporter.
9. A Certificate of Origin shall be issued only after the exporter who requests the Certificate of Origin, or the producer of a good in the exporting Party referred to in subparagraph 8(b), proves to the competent governmental authority of the exporting Party or its designees that the good to be exported qualifies as an originating good of the exporting Party.
10. The competent governmental authority of the exporting Party shall provide the importing Party with specimen signatures and impressions of stamps used in the offices of the competent governmental authority or its designees.
11. Each Partyin accordance with its laws and regulations, shall ensure that the competent governmental authority or its designees shall keep a record of issued Certificate of Origin for a period of five years after the date on which the Certificate was issued. Such record includes all supporting documents presented to prove the qualification as an originating good of the exporting Party.
12. The competent governmental authority of the exporting Party shall, when it cancels the decision to issue a Certificate of Origin, promptly notify the cancellation to the exporter to whom the Certificate of Origin has been issued, and to the customs authority of the importing Party, except where the Certificate of Origin has been returned to the competent governmental authority.

Article 3.17. Obligations Regarding Exportations

Each Party shall, in accordance with its laws and regulations, ensure that an exporter to whom a Certificate of Origin has been issued, or the producer of a good in the exporting Party referred to in subparagraph 8(b) of Article 3.16 shall:
(a) notify in writing the competent governmental authority of the exporting Party or its designees without delay, when such exporter or producer knows that the good for which the Certificate of Origin has been issued does not qualify as an originating good of the exporting Party; and
(b) keep the records related to the origin of the good for five years after the date on which the Certificate of Origin was issued.

Article 3.18. Request for Checking of Certificate of Origin

1. In order to ensure the proper application of this Chapter, the Parties shall assist each other to check the information related to a Certificate of Origin, in accordance with this Agreement and their respective laws and regulations.
2. For the purposes of determining whether a good imported from the exporting Party under preferential tariff treatment qualifies as an originating good of the exporting Party, the customs authority of the importing Party may request information related to the origin of the good from the competent governmental authority of the exporting Party on the basis of a Certificate of Origin.
3. For the purposes of paragraph 2, the competent governmental authority of the exporting Party shall, in accordance with the laws and regulations of the exporting Party, provide the requested information in a period not exceeding four months after the date of receipt of the request. If the customs authority of the importing Party considers necessary, it may require additional information related to the origin of the good. If additional information is requested by the customs authority of the importing Party, the competent governmental authority of the exporting Party shall, in accordance with the laws and regulations of the exporting Party, provide the requested information in a period not exceeding two months after the date of receipt of the request.
4. For the purposes of paragraph 3, the competent governmental authority of the exporting Party may request the exporter to whom the Certificate of Origin has been issued, or the producer of the good in the exporting Party referred to in subparagraph 8(b) of Article 3.16, to provide the former with the requested information.

Article 3.19. Verification Visit

1. If the customs authority of the importing Party is not satisfied with the outcome of the request for checking in accordance with Article 3.18, it may request the exporting Party to:
(a) collect and provide information related to the origin of a good, and check, for that purpose, the facilities used in the production of the good, through a visit by the competent governmental authority of the exporting Party along with the customs authority of the importing Party to the premises of the exporter to whom the Certificate of Origin has been issued, or the producer of the good in the exporting Party referred to in subparagraph 8(b) of Article 3.16; and
(b) provide information related to the origin of the good in the possession of the competent governmental authority of the exporting Party or its designee, during or after the visit referred to in subparagraph (a).
2. When requesting the exporting Party to conduct a visit in accordance with paragraph 1, the customs authority of the importing Party shall deliver a written communication with such request to the exporting Party at least 40 days in advance of the proposed date of the visit, the receipt of which is to be confirmed by the exporting Party. The competent governmental authority of the exporting Party shall request the written consent of the exporter, or the producer of the good in the exporting Party, whose premises are to be visited.
3. The communication referred to in paragraph 2 shall include:
(a) the identity of the customs authority issuing the communication;
(b) the name of the exporter, or the producer of the good in the exporting Party, whose premises are requested to be visited;
(c) the proposed date and place of the visit;
(d) the objective and scope of the proposed visit, including specific reference to the good subject of the verification referred to in the Certificate of Origin; and
(e) the names and titles of the officials of the customs authority of the importing Party to be present during the visit.
4. The exporting Party shall respond in writing to the importing Party, within 30 days after the receipt of the communication referred to in paragraph 2, whether it accepts or refuses to conduct the visit requested in accordance with paragraph 1.
5. The competent governmental authority of the exporting Party shall, in accordance with the laws and regulations of the exporting Party, provide within 45 days or any other mutually agreed period after the last day of the visit, to the customs authority of the importing Party the information obtained in accordance with paragraph 1.

Article 3.20. Determination of Origin and Preferential Tariff Treatment

1. The customs authority of the importing Party may deny preferential tariff treatment to a good for which an importer claims preferential tariff treatment where the good does not qualify as an originating good of the exporting Party or where the importer fails to comply with any of the relevant requirements of this Chapter. 2. The customs authority of the importing Party may determine that a good does not qualify as an originating good of the exporting Party and may deny preferential tariff treatment where it receives the notification from the competent governmental authority of the exporting Party to cancel the decision to issue the Certificate of Origin for the good in accordance with paragraph 12 of Article 3.16.
3. The customs authority of the importing Party may determine that a good does not qualify as an originating good of the exporting Party and may deny preferential tariff treatment, and a written determination thereof shall be sent to the competent governmental authority of the exporting Party where:
(a) the competent governmental authority of the exporting Party fails to provide the information within the period referred to in paragraph 3 of Article 3.18 or paragraph 5 of Article 3.19;
(b) the exporting Party refuses to conduct a visit, or that Party fails to respond to the communication referred to in paragraph 2 of Article 3.19 within the period referred to in paragraph 4 of Article 3.19; or
(c) the information provided to the customs authority of the importing Party in accordance with Article 3.18 or 3.19 is not sufficient to prove that the good qualifies as an originating good of the exporting Party.
4. After carrying out the procedures outlined in Article 3.18 or 3.19 as the case may be, the customs authority of the importing Party shall provide the competent governmental authority of the exporting Party with a written determination of whether or not the good qualifies as an originating good of the exporting Party, including findings of fact and the legal basis for the determination. The competent governmental authority of the exporting Party shall inform such determination by the customs authority of the importing Party to the exporter, or the producer of the good in the exporting Party, whose premises were subject of the visit referred to in Article 3.19.

Article 3.21. Confidentiality

1. Each Party shall maintain, in accordance with its laws and regulations, the confidentiality of information provided to it as confidential in accordance with this Chapter, and shall protect that information from disclosure that could prejudice the competitive position of the persons providing the information.
2. Information obtained by the customs authority of the importing Party in accordance with this Chapter:
(a) may only be used by such authority for the purposes of this Chapter; and
(b) shall not be used by the importing Party in any criminal proceedings carried out by a court or a judge, unless the information is requested to the exporting Party and provided to the importing Party through the diplomatic channels or other channels established in accordance with the applicable laws and regulations of the exporting Party.

Article 3.22. Minor Errors

The customs authority of the importing Party shall disregard minor errors, such as slight discrepancies or omissions, typing errors or protruding from the designated field, provided that these minor errors are not such as to create doubts concerning the accuracy of the information included in the Certificate of Origin.

Article 3.23. Penalties and Measures Against False Declaration

1. Each Party shall establish or maintain, in accordance with its laws and regulations, appropriate penalties or other sanctions against its exporters to whom a Certificate of Origin has been issued and the producers of a good in the exporting Party referred to in subparagraph 8(b) of Article 3.16, for providing false declaration or documents to the competent governmental authority of the exporting Party or its designees prior to the issuance of Certificate of Origin.
2. Each Party shall, in accordance with its laws and regulations, take measures which it considers appropriate against its exporters to whom a Certificate of Origin has been issued and the producers of a good in the exporting Party referred to in subparagraph 8(b) of Article 3.16, for failing to notify in writing to the competent governmental authority of the exporting Party or its designees without delay after having known, after the issuance of Certificate of Origin, that the good for which the Certificate of Origin has been issued does not qualify as an originating good of the exporting Party. Note: For greater certainty, the exporters to whom a Certificate of Origin has been issued and the producers of a good in the exporting Party referred to in subparagraph 8(b) of Article 3.16 are not subject to the measures referred to in this paragraph, in accordance with the laws and regulations of each Party, provided that they notify in writing to the competent governmental authority of the exporting Party or its designees without delay after having known, after the issuance of Certificate of Origin, that the good for which the Certificate of Origin has been issued does not qualify as an originating good of the exporting Party.

Article 3.24. Miscellaneous

Communications between the importing Party and the exporting Party shall be conducted in the English language.

Article 3.25. Sub-committee on Rules of Origin

1. For the purposes of the effective implementation and operation of this Chapter, the Parties hereby establish a Sub-Committee on Rules of Origin (hereinafter referred to in this Article as "the Sub-Committee"). 2. The functions of the Sub-Committee shall be:
(a) reviewing and making appropriate recommendations, as necessary, to the Joint Committee on:
(i) the implementation and operation of this Chapter;
(ii) any amendments to Annex 2 or 3, proposed by either Party; and
(iii) the Operational Procedures for Rules of Origin referred to in Article 3.26;
(b) considering any other matter as the Parties may agree related to this Chapter;
(c) reporting the findings of the Sub-Committee to the Joint Committee; and
(d) carrying out other functions as may be delegated by the Joint Committee.
3. The Sub-Committee shall be composed of representatives of the Governments of the Parties.
4. The Sub-Committee shall hold meetings at such times and venues or by means, as may be agreed by the Parties.

Article 3.26. Operational Procedures for Rules of Origin

Upon the date of entry into force of this Agreement, the Joint Committee shall adopt the Operational Procedures for Rules of Origin that provide detailed regulations pursuant to which the customs authorities, the competent governmental authorities and other relevant authorities of the Parties shall implement their functions under this Chapter.

Chapter 4. Customs Procedures and Trade Facilitation

Article 4.1. Scope and Objectives

1. This Chapter shall apply to customs procedures required for the clearance of goods traded between the Parties.
2. This Chapter shall be implemented by the Parties in accordance with the laws and regulations of each Party and within the available resources of their respective customs authorities.
3. The objectives of this Chapter are to establish a framework to ensure transparency, proper application of customs laws and prompt clearance of goods and to promote cooperation in the field of customs procedures, with a view to facilitating trade in goods between the Parties.

Article 4.2. Definition

For the purposes of this Chapter, the term "customs laws" means such laws and regulations administered and enforced by the customs authority of each Party concerning the importation, exportation and transit of goods, as they relate to customs duties, charges and other taxes, or to prohibitions, restrictions and other similar controls with respect to the movement of controlled items across the boundary of the customs territory of each Party

Article 4.3. Transparency

1. Each Party shall ensure that all relevant information of general application pertaining to its customs laws is readily available to any interested person.
2. When information that has been made available must be revised due to changes in its customs laws, each Party shall make the revised information readily available, whenever possible in advance of the entry into force of the changes, to enable interested persons to take account of them.
3. Upon request of any interested person of the Parties, each Party shall provide, as quickly and accurately as possible, information related to the specific customs matters raised by the interested person and pertaining to its customs laws. Each Party shall supply not only the information specifically requested but also any other pertinent information which it considers the interested person should be made aware of.
4. Each Party shall designate one or more enquiry points to answer reasonable enquiries from any interested person of the Parties concerning customs matters, and shall make publicly available, includingthrough its website, the names and addresses of such enquiry points.

Article 4.4. Customs Clearance

1. The Parties shall apply their respective customs procedures in a predictable, consistent and transparent manner.
2. For prompt customs clearance of goods traded between the Parties, each Partyshall:
(a) make use of information and communications technology;
(b) simplify its customs procedures;
(c) harmonize its customs procedures, to the extent possible, with relevant international standards and recommended practices such as those made under the auspices of the Customs Co-operation Council; and (d) promote cooperation, where appropriate, between its customs authority and:
(i) other national authorities of the Party;
(ii) the trading communities of the Party; and
(iii) the customs authorities of non-Parties.
3. Each Party shall provide affected parties with easily accessible processes of judicial or administrative review related to the action on the customs matters taken by the Party. Such review shall be independent of the authorities entrusted with the administrative enforcement of such actions and shall be carried out in an impartial and fair manner.