(a) the value of non-originating goods in the set shall be calculated in the same manner as the value of non-originating materials in Chapter 3 (Rules of Origin and Origin Procedures); and
(b) the value of the set shall be calculated in the same manner as the value of the good in Chapter 3 (Rules of Origin and Origin Procedures).
Treatment of Short Supply List Materials
7. Each Party shall provide that, for the purposes of determining whether a textile or apparel good is originating under Article 3.2(c) (Originating Goods), a material listed in Appendix 1 (Short Supply List of Products) to Annex 4-A (Textiles and Apparel Product-Specific Rules of Origin) is originating provided that the material meets any requirement, including any end use requirement, specified in the Appendix 1 (Short Supply List of Products) to Annex 4-A (Textiles and Apparel Product-Specific Rules of Origin).
8. If a claim that a textile or apparel good is originating relies on the incorporation of a material listed in Appendix 1 (Short Supply List of Products) to Annex 4-A (Textiles and Apparel Product-Specific Rules of Origin), the importing Party may require in the importation documentation, such as a certification of origin, the number or description of the material on Appendix 1 (Short Supply List of Products) to Annex 4-A (Textiles and Apparel Product- Specific Rules of Origin).
9. Non-originating materials marked as temporary in Appendix 1 (Short Supply List of Products) to Annex 4-A (Textiles and Apparel Product-Specific Rules of Origin) may be considered as originating under paragraph 7 for five years from the date of entry into force of this Agreement.
Treatment for Certain Handmade or Folkloric Goods
10. An importing Party may identify particular textile or apparel goods of an exporting Party to be eligible for duty-free or preferential tariff treatment that the importing and exporting Parties mutually agree fall within:
(a) hand-loomed fabrics of a cottage industry;
(b) hand-printed fabrics with a pattern created with a wax-resistance technique;
(c) hand-made cottage industry goods made of such hand-loomed or hand-printed fabrics; or
(d) traditional folklore handicraft goods;
provided that any requirements agreed by the importing and exporting Parties for such treatment are met.
Article 4.3. Emergency Actions
1. Subject to this Article if, as a result of the reduction or elimination of a customs duty under this Agreement, a textile or apparel good benefiting from preferential tariff treatment under this Agreement is being imported into the territory of a Party in such increased quantities, in absolute terms or relative to the domestic market for that good, and under such conditions as to cause serious damage, or actual threat thereof, to a domestic industry producing a like or directly competitive good, the importing Party may, to the extent and for such time as may be necessary to prevent or remedy such damage and to facilitate adjustment, take emergency action in accordance with paragraph 6, consisting of an increase in the rate of duty on the good of the exporting Party or Parties to a level not to exceed the lesser of:
(a) the most-favoured-nation applied rate of customs duty in effect at the time the action is taken; and
(b) the most-favoured-nation applied rate of customs duty in effect on the day immediately preceding the date of entry into force of this Agreement for the importing Party.
2. Nothing in this Article shall be construed to limit the rights and obligations of a Party under Article XIX of GATT 1994 and the Safeguards Agreement, or Chapter 6 (Trade Remedies).
3. In determining serious damage, or actual threat thereof, the importing Party:
(a) shall examine the effect of increased imports from the exporting Party or Parties of a textile or apparel good benefiting from preferential tariff treatment under this Agreement on the particular industry, as reflected in changes in such relevant economic variables as output, productivity, utilisation of capacity, inventories, market share, exports, wages, employment, domestic prices, profits and investment, none of which cither alone or combined with other factors shall necessarily be decisive; and
(b) shall not consider changes in technology or consumer preference in the importing Party as factors supporting a determination of serious damage, or actual threat thereof.
4. The importing Party may take an emergency action under this Article only following its publication of procedures that identify the criteria for a finding of serious damage, or actual threat thereof, and an investigation by its competent authorities. Such an investigation must use data based on the factors described in paragraph 3(a) that serious damage or actual threat thereof is demonstrably caused by increased imports of the product concerned as a result of this Agreement.
5. The importing Party shall submit to the exporting Party or Parties, without delay, written notice of the initiation of the investigation provided for in paragraph 4, as well as of its intent to take emergency action and, on the request of the exporting Party or Parties, shall enter into consultations with that Party or Parties regarding the matter. The importing Party shall provide the exporting Party or Parties with the full details of the emergency action to be taken. The Parties concerned shall begin consultations without delay and, unless otherwise decided, shall complete them within 60 days of receipt of the request. After completion of the consultations, the importing Party shall notify the exporting Party or Parties of any decision. If it decides to take an emergency action, the notification shall include the details of the emergency action, including when it will take effect.
6. The following conditions and limitations shall apply to any emergency action taken under this Article:
(a) no emergency action shall be maintained for a period exceeding two years unless extended for an additional period of up to two years;
(b) no emergency action shall be taken or maintained beyond the expiration of the transition period;
(c) no emergency action shall be taken by an importing Party against any particular good of another Party or Parties more than once; and
(d) on termination of the emergency action, the importing Party shall accord to the good that was subject to the emergency action the tariff treatment that would have been in effect but for the emergency action.
7. The Party taking an emergency action under this Article shall provide to the exporting Party or Parties against whose goods the emergency action is taken mutually agreed trade liberalising compensation in the form of concessions either having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the emergency action. Such concessions shall be limited to textile and apparel goods, unless the Parties concerned otherwise agree. If the Parties concerned are unable to agree on compensation within 60 days or a longer period agreed by the Parties concerned, the Party or Parties against whose good the emergency action is taken may take tariff action that has trade effects substantially equivalent to the trade effects of the emergency action taken under this Article. The tariff action may be taken against any goods of the Party taking the emergency action. The Party taking the tariff action shall apply it only for the minimum period necessary to achieve the substantially equivalent trade effects. The importing Party's obligation to provide trade compensation and the exporting Party's right to take tariff action shall terminate when the emergency action terminates.
8. No Party shall take or maintain an emergency action under this Article against a textile or apparel good that is subject, or becomes subject, to a transitional safeguard measure under Chapter 6 (Trade Remedies), or to a safeguard measure that a Party takes pursuant to Article XIX of GATT 1994 and the Safeguards Agreement.
9. The investigations referred to in this Article shall be carried out according to procedures established by cach Party. Each Party shall, on the date of entry into force of this Agreement for that Party or before it initiates an investigation, notify the other Parties of these procedures.
10. Each Party shall, in any year where it takes or maintains an emergency action under this Article, provide a report on such actions to the other Parties.
Article 4.4. Cooperation
1. Each Party shall, in accordance with its laws and regulations, cooperate with other Parties for the purposes of enforcing or assisting in the enforcement of their respective measures concerning customs offences for trade in textile or apparel goods between the Parties, including ensuring the accuracy of claims for preferential tariff treatment under this Agreement.
2. Each Party shall take appropriate measures, which may include legislative, administrative, judicial or other action for:
(a) enforcement of its laws, regulations and procedures related to customs offences; and
(b) cooperation with an importing Party in the enforcement of its laws, regulations and procedures related to the prevention of customs offences.
3. For the purposes of paragraph 2, "appropriate measures" means measures a Party takes, in accordance with its laws, regulations and procedures, such as:
(a) providing its government officials with the legal authority to meet the obligations under this Chapter,
(b) enabling its law enforcement officials to identify and address customs offences;
(c) establishing or maintaining criminal, civil or administrative penalties that are aimed at deterring customs offences;
(d) undertaking appropriate enforcement action when it believes, based on a request from another Party that includes relevant facts, that a customs offence has occurred or is occurring in the requested Party's territory with regard to a textile or apparel good, including in free trade zones of the requested Party; and
(e) cooperating with another Party, on request, to establish facts regarding customs offences in the requested Party's territory with regard to a textile or apparel good, including in free trade zones of the requested Party.
4. A Party may request information from another Party if it has relevant facts, such as historical evidence, indicating that a customs offence is occurring or is likely to occur.
5. Any request under paragraph 4 shall be made in writing, by electronic means or any other method that acknowledges receipt, and shall include a brief statement of the matter at issue, the cooperation requested, the relevant facts indicating a customs offence, and sufficient information for the requested Party to respond in accordance with its laws and regulations.
6. To enhance cooperative efforts under this Article between Parties to prevent and address customs offences, a Party that receives a request under paragraph 4 shall, subject to its laws, regulations and procedures, including those related to confidentiality referred to in Article 4.9.4 (Confidentiality) provide to the requesting Party, upon receipt of a request in accordance with paragraph 5, available information on the existence of an importer, exporter or producer, goods of an importer, exporter or producer, or other matters related to this Chapter. The information may include any available correspondence, reports, bills of lading, invoices, order contracts or other information regarding enforcement of laws or regulations related to the request.
7. A Party may provide information requested in this Article on paper or in electronic form.
8. Each Party shall designate and notify a contact point for cooperation under this Chapter in accordance with Article 27.5 (Contact Points) and shall notify the other Parties promptly of any subsequent changes.
Article 4.5. Monitoring
1. Each Party shall establish or maintain programmes or practices to identify and address textiles and apparel customs offences. This may include programmes or practices to ensure the accuracy of claims for preferential tariff treatment for textile and apparel goods under this Agreement.
2. Through those programmes or practices, a Party may collect or share information related to textiles or apparel goods for use for risk management purposes.
3. In addition to paragraphs 1 and 2, some Parties have bilateral agreements that apply between those Parties.
Article 4.6. Verification
1. An importing Party may conduct a verification with respect to a textile or apparel good pursuant to Article 3.27.1(a), Article 3.27.1(b) or Article 3.27.1(e) (Verification of Origin) and their associated procedures to verify whether a good qualifies for preferential tariff treatment or through a request for a site visit as described in this Article. (3)
2. An importing Party may request a site visit under this Article from an exporter or producer of textile or apparel goods to verify whether:
(a) a textile or apparel good qualifies for preferential tariff treatment under this Agreement; or
(b) customs offences are occurring or have occurred.
3. During a site visit under this Article, an importing Party may request access to:
(a) records and facilities relevant to the claim for preferential tariff treatment; or
(b) records and facilities relevant to the customs offences being verified.
4. If an importing Party secks to conduct a site visit under paragraph 2, it shall notify the host Party, no later than 20 days before the visit, regarding:
(a) the proposed dates;
(b) the number of exporters and producers to be visited in appropriate detail to facilitate the provision of any assistance, but does not need to specify the names of the exporters or producers to be visited;
(c) whether assistance by the host Party will be requested and what type;
(d) if relevant, the customs offences being verified under paragraph 2(b), including relevant factual information available at the time of the notification related to the specific offences, which may include historical information; and.
(e) whether the importer claimed preferential tariff treatment.
5. On receipt of information on a proposed visit under paragraph 2, the host Party may request information from the importing Party to facilitate planning of the visit, such as logistical arrangements or provision of requested assistance.
6. If an importing Party secks to conduct a site visit under paragraph 2, it shall provide the host Party, as soon as practicable and prior to the date of the first visit to an exporter or producer under this Article, with a list of the names and addresses of the exporters or producers it proposes to visit.
7. If an importing Party seeks to conduct a site visit under paragraph 2:
(a) officials of the host Party may accompany the officials of the importing Party during the site visit;
(b) officials of the host Party may, in accordance with its laws and regulations, on request of the importing Party or on its own initiative, assist the officials of the importing Party during the site visit and provide, to the extent available, information relevant to conduct the site visit;
(c) the importing and host Parties shall limit communication regarding the site visit to relevant government officials and shall not inform the exporter or producer outside the government of the host Party in advance of a visit or provide any other verification or enforcement information not publicly available whose disclosure could undermine the effectiveness of the action;
(d) the importing Party shall request permission from the exporter or producer (4) for access to the relevant records or facilities, no later than the time of the visit. Unless advance notice would undermine the effectiveness of the site visit, the importing Party shall request permission with appropriate advance notice; and
(e) if the exporter or producer of textile or apparel goods denies such permission or access, the visit will not occur. The importing Party shall give consideration to any reasonable alternative dates proposed, taking into account the availability of relevant employees or facilities of the person visited.
8. On completion of a site visit under paragraph 2, the importing Party shall:
(a) on request of the host Party, inform the host Party of its preliminary findings;
(b) on receiving a written request from the host Party, provide the host Party with a written report of the results of the visit, including any findings, no later than 90 days after the date of the request. If the report is not in English, the importing Party shall provide a translation of it in English on request of the host Party; and
(c) on receiving a written request of the exporter or producer, provide that person with a written report of the results of the visit as it pertains to that exporter or producer, including any findings, no later than 90 days after the date of the request. This may be a report prepared under subparagraph (b), with appropriate changes. The importing Party shall inform the exporter or producer of the entitlement to request this report. If the report is not in English, the importing Party shall provide a translation of it in English on request of that exporter or producer.
9. If an importing Party conducts a site visit under paragraph 2 and, as a result, intends to deny preferential tariff treatment to a textile or apparel good, it shall, before it may deny preferential tariff treatment, provide to the importer and any exporter or producer that provided information directly to the importing Party 30 days to submit additional information to support the claim for preferential tariff treatment. If advance notice was not given under paragraph 7(d), that importer, exporter or producer may request an additional 30 days.
10. The importing Party shall not reject a claim for preferential tariff treatment on the sole grounds that the host Party does not provide the requested assistance or information under this Article.
11. While a verification is being conducted under this Article, the importing Party may take appropriate measures under procedures established in its laws and regulations, including suspending or denying the application of preferential tariff treatment to textile or apparel goods of the exporter or producer subject to a verification.
12. If verifications of identical textile or apparel goods by an importing Party indicate a pattern of conduct by an exporter or producer of false or unsupported representations that a textile or apparel good imported into its territory qualifies for preferential tariff treatment, the importing Party may withhold preferential tariff treatment for identical textile or apparel goods imported, exported or produced by that person until it is demonstrated to the importing Party that those identical textile or apparel goods qualify for preferential tariff treatment. For the purposes of this paragraph, "identical textile or apparel goods" means textile or apparel goods that are the same in all respects relevant to the particular rule of origin that qualifies the goods as originating.
Article 4.7. Determinations
The importing Party may deny a claim for preferential tariff treatment for a textile or apparel good:
(a) for a reason listed in Article 3.28.2 (Determination on Claims for Preferential Tariff Treatment);
(b) if, pursuant to a verification under this Chapter, it has not received sufficient information to determine that the textile or apparel good qualifies as originating; or
(c) if, pursuant to a verification under this Chapter, access or permission for the visit is denied, the importing Party is prevented from completing the visit on the proposed date, and the exporter or producer does not provide an alternative date acceptable to the importing Party, or the exporter or producer does not provide access to the relevant records or facilities during a visit.
Article 4.8. Committee on Textile and Apparel Trade Matters
1. The Parties hereby establish a Committee on Textile and Apparel Trade Matters, (Committee), composed of government representatives of each Party.
2. The Committee shall meet at least once within one year of the date of entry into force of this Agreement, and thereafter at such times as the Parties decide and on request of the Commission. The Committee shall meet at such venues and times as the Parties decide.
3. The Committee may consider any matter arising under this Chapter, and its functions shall include review of the implementation of this Chapter, consultation on technical or interpretive difficulties that may arise under this Chapter, and discussion of ways to improve the effectiveness of cooperation under this Chapter.
4. In addition to discussions under the Committee, a Party may request in writing discussions with any other Party or Parties regarding matters under this Chapter concerning those Parties, with a view to resolution of the issue, if it believes difficulties are occurring with respect to implementation of this Chapter.
5. Unless the Parties amongst whom a discussion is requested agree otherwise, they shall hold the discussions pursuant to paragraph 4 within 30 days of receipt of a written request by a Party and endeavour to conclude within 90 days of receipt of the written request.
6. Discussions under this Article shall be confidential and without prejudice to the rights of any Party in any other proceeding.
7. Prior to the entry into force of an amended version of the Harmonized System, the Committee shall consult to prepare updates to this Chapter that are necessary to reflect changes to the Harmonized System.
Article 4.9. Confidentiality
1. Each Party shall maintain the confidentiality of the information collected in accordance with this Chapter and shall protect that information from disclosure that could prejudice the competitive position of the person providing the information.
2. If a Party provides information to another Party in accordance with this Chapter and designates the information as confidential, the other Party shall keep the information confidential. The Party that provides the information may require the other Party to furnish written assurance that the information will be held in confidence, used only for the purposes specified in the other Party's request for information, and not disclosed without the specific permission of the Party that provided the information or the person that provided the information to that Party.
3. A Party may decline to provide information requested by another Party if that Party has failed to act in conformity with paragraph 1 or 2.
4. Each Party shall adopt or maintain procedures for protecting from unauthorised disclosure confidential information submitted in accordance with the administration of the Partyâs customs or other laws related to this Chapter, or collected in accordance with this Chapter, including information the disclosure of which could prejudice the competitive position of the person providing the information.
Chapter 5. CUSTOMS ADMINISTRATION AND TRADE FACILITATION
Article 5.1. Customs Procedures and Facilitation of Trade
Each Party shall ensure that its customs procedures are applied in a manner that is predictable, consistent and transparent.
Article 5.2. Customs Cooperation
1. With a view to facilitating the effective operation of this Agreement, each Party shall:
(a) encourage cooperation with other Parties regarding significant customs issues that affect goods traded between the Parties; and
(b) endeavour to provide each Party with advance notice of any significant administrative change, modification of a law or regulation, or similar measure related to its laws or regulations that governs importations or exportations, that is likely to substantially affect the operation of this Agreement.
2. Each Party shall, in accordance with its law, cooperate with the other Parties through information sharing and other activities as appropriate, to achieve compliance with their respective laws and regulations that pertain to:
(a) the implementation and operation of the provisions of this Agreement governing importations or exportations, including claims for preferential tariff treatment, procedures for making claims for preferential tariff treatment and verification procedures;
(b) the implementation, application and operation of the Customs Valuation Agreement;
(c) restrictions or prohibitions on imports or exports;
(d) investigation and prevention of customs offences, including duty evasion and smuggling; and
(e) other customs matters as the Parties may decide.
3. If a Party has a reasonable suspicion of unlawful activity related to its laws or regulations governing importations, it may request that another Party provide specific confidential information that is normally collected in connection with the importation of goods.
4. If a Party makes a request under paragraph 3, it shall:
(a) be in writing;
(b) specify the purpose for which the information is sought; and
(c) identify the requested information with sufficient specificity for the other Party to locate and provide the information.
5. The Party from which the information is requested under paragraph 3 shall, subject to its law and any relevant international agreements to which it is a party, provide a written response containing the requested information.
6. For the purposes of paragraph 3, "a reasonable suspicion of unlawful activity" means a suspicion based on relevant factual information obtained from public or private sources comprising one or more of the following:
(a) historical evidence of non-compliance with laws or regulations that govern importations by an importer or exporter;
(b) historical evidence of non-compliance with laws or regulations that govern importations by a manufacturer, producer or other person involved in the movement of goods from the territory of one Party to the territory of another Party;
(c) historical evidence of non-compliance with laws or regulations that govern importations by some or all of the persons involved in the movement of goods within a specific product sector from the territory of one Party to the territory of another Party; or
(d) other information that the requesting Party and the Party from which the information is requested agree is sufficient in the context of a particular request.
7. Each Party shall endeavour to provide another Party with any other information that would assist that Party to determine whether imports from, or exports to, that Party are in compliance with the receiving Party's laws or regulations that govern importations, in particular those related to unlawful activities, including smuggling and similar infractions.
8. In order to facilitate trade between the Parties, a Party receiving a request shall endeavour to provide the Party that made the request with technical advice and assistance for the purpose of:
(a) developing and implementing improved best practices and risk management techniques;
(b) facilitating the implementation of international supply chain standards;
(c) simplifying and enhancing procedures for clearing goods through customs in a timely and efficient manner;
(d) developing the technical skill of customs personnel; and
(e) enhancing the use of technologies that can lead to improved compliance with the requesting Party's laws or regulations that govern importations.
9. The Parties shall endeavour to establish or maintain channels of communication for customs cooperation, including by establishing contact points in order to facilitate the rapid and secure exchange of information and improve coordination on importation issues.
Article 5.3. Advance Rulings
1. Each Party shall issue, prior to the importation of a good of a Party into its territory, a written advance ruling at the written request of an importer in its territory, or an exporter or producer in the territory of another Party (1), with regard to (2):
(a) tariff classification;
(b) the application of customs valuation criteria for a particular case in accordance with the Customs Valuation Agreement;
(c) whether a good is originating in accordance with Chapter 3 (Rules of Origin and Origin Procedures); and
(d) such other matters as the Parties may decide.
2. Each Party shall issue an advance ruling as expeditiously as possible and in no case later than 150 days after it receives a request, provided that the requester has submitted all the information that the receiving Party requires to make the advance ruling. This includes a sample of the good for which the requester is secking an advance ruling if requested by the receiving Party. In issuing an advance ruling, the Party shall take into account the facts and circumstances that the requester has provided. For greater certainty, a Party may decline to issue an advance ruling if the facts and circumstances forming the basis of the advance ruling are the subject of administrative or judicial review. A Party that declines to issue an advance ruling shall promptly notify the requester in writing, setting out the relevant facts and circumstances and the basis for its decision to decline to issue the advance ruling.
3. Each Party shall provide that its advance rulings shall take effect on the date that they are issued or on another date specified in the ruling, and remain in effect for at least three years, provided that the law, facts and circumstances on which the ruling is based remain unchanged. If a Party's law provides that an advance ruling becomes ineffective after a fixed period of time, that Party shall endeavour to provide procedures that allow the requester to renew the ruling expeditiously before it becomes ineffective, in situations in which the law, facts and circumstances on which the ruling was based remain unchanged.
4. After issuing an advance ruling, the Party may modify or revoke the advance ruling if there is a change in the law, facts or circumstances on which the ruling was based, if the ruling was based on inaccurate or false information, or if the ruling was in error.
5. A Party may apply a modification or revocation in accordance with paragraph 4 after it provides notice of the modification or revocation and the reasons for it.
6. No Party shall apply a revocation or modification retroactively to the detriment of the requester unless the ruling was based on inaccurate or false information provided by the requester.
7. Each Party shall ensure that requesters have access to administrative review of advance rulings.
8. Subject to any confidentiality requirements in its law, cach Party shall endeavour to make its advance rulings publicly available, including online.