(d) providing advice and recommendations to the Joint Committee on cooperation needs regarding trade in goods matters;
(e) reviewing the amendments to the Harmonized System (HS) to ensure that each Party's obligations under this Agreement are not altered, and consulting to resolve any conflicts between:
(i) such amendments to the Harmonized System (HS) and Annex 2A (Georgia Schedule of Tariff Commitments) or 2B (UAE Schedule of Tariff Commitments); and
(ii) national nomenclatures;
(f) consulting on and endeavouring to resolve any difference that may arise among the Parties on matters related to the classification of goods under the Harmonized System (HS);
(g) exchanging data on trade in goods in accordance with Article 2.19 (Exchange of Data);
(h) assessing matters that relate to trade in goods and undertaking any additional work that the Joint Committee may assign to it; and
(i) reviewing and monitoring any other matter related to the implementation of this chapter.
Chapter 3. RULES OF ORIGIN
Section A. Origin Determination
Article 3.1. Definitions
For the purposes of this Chapter:
Aquaculture refers to the farming of aquatic organisms including fish, molluscs, crustaceans, other aquatic invertebrates and aquatic plants, from seedstock such as eggs, fry, fingerlings and larvae, by intervention in the rearing or growth processes to enhance production, such as, inter alia, regular stocking, feeding, protection from predators;
Customs Value refers to the price actually paid or payable to the exporter for a product when the product is loaded out of the carrier, at the port of importation, including the cost of the product, insurance and freight necessary to deliver the product to the named port of destination. The valuation shall be made in accordance with Article VII of the GATT 1994, including its notes and supplementary provision thereof, and the Customs Valuation Agreement;
Competent Authority refers to:
(a) in the case of Georgia, the Legal Entity of Public Law-Revenue Service of the Ministry of Finance of Georgia ("LEPL") or any other agency notified from time to time; and
(b) in the case of the UAE, the Ministry of Economy or any other agency notified from time to time;
Consignment means products which are either sent simultaneously from one exporter to one consignee or covered by a single transport document covering their shipment from the exporter to the consignee or, in the absence of such a document, by a single invoice;
Customs Authorities refers to:
(a) in the case of Georgia, LEPL -Revenue Service of the Ministry of Finance of Georgia; and
(b) in the case of the UAE, the Federal Authority for Identity and Citizenship, Customs and Port Security;
Fungible Material or Fungible Good means material or a good that is of the same kind and commercial quality, with the same technical and physical characteristics, and which cannot be distinguished from another material or good;
Generally Accepted Accounting Principles refers to the recognised consensus or substantial authoritative support in the territory of a Party, with respect to the recording of revenues, expenses, costs, assets and liabilities, the disclosure of information and the preparation of financial statements. These standards may encompass broad guidelines of general application as well as detailed standards, practices and procedures;
Good refers to any merchandise, product, article or material;
Harmonized System (HS) refers to the Harmonized Commodity Description and Coding System, including its general rules and legal notes set out in the Annex to the International Convention on the Harmonized Commodity Description and Coding System;
Indirect Material refers to a material used in the production, testing or inspection of a good but not physically incorporated into the good, or the operation of equipment associated with the production of a good, including:
(c) fuel and energy;
(d) tools, dies and molds;
(e) spare parts and materials used in the maintenance of equipment;
(f) lubricants, greases, compounding materials and other materials used m production or used to operate equipment;
(g) gloves, glasses, footwear, clothing and safety equipment and supplies;
(h) equipment, devices, supplies used for testing or inspecting the goods;
(i) catalysts and solvents; and
(j) any other material that is not incorporated into the good but for which the use in the production of the good can reasonably be demonstrated to be a part of that production;
Manufacture refers to any kind of working or processing, including assembly or specific operations;
Material refers to any ingredient, raw material, compound or part, etc., used in the production of a good;
Non-Originating Good refers to a good that does not qualify as originating under this Chapter;
Non-Originating Material (NOM) refers to any materials whose country of origin is a country other than the Parties (imported non-originating), any materials whose origin cannot be determined (undetermined origin) or a material that does not qualify as originating under this Chapter;
Originating Good or Originating Material refers to goods or materials that qualify as originating under this Chapter;
Product refers to that which is obtained by growing, raising, mining, harvesting, fishing, aquaculture, trapping, hunting, extracting or manufactured, even if it is intended for later use in another manufacturing operation; and Production refers to growing, raising, mmmg, harvesting, fishing, aquaculture, trapping, hunting, manufacturing, processing, assembling or disassembling a good.
Article 3.2. Originating Goods
For the purpose of implementing this Agreement, goods shall be considered as originating in the territory of a Party, if:
(a) goods are wholly obtained or produced there according to Article 3.3 (Wholly Obtained or Produced Goods);
(b) goods are not wholly obtained or produced entirely there, provided that the goods have undergone sufficient transformation according to Article 3.4 (Sufficient Working or Production); or
(c) goods produced entirely there exclusively from originating materials of any of the Parties. and the goods satisfied all other applicable requirements of this Chapter.
Article 3.3. Wholly Obtained or Produced Goods
For the purposes of this Agreement, the following goods shall be considered as being wholly obtained or produced in the territory of a Party:
(a) plant and plant products grown, collected, and harvested there;
(b) live animals born and raised there;
(c) products obtained from live animals there;
(d) mineral products and natural resources extracted or taken from that Party's soil, subsoil, waters, seabed or beneath the seabed;
(e) products obtained from hunting, trapping, collecting, capturing, fishing or aquaculture conducted there;
(f) products of sea fishing and other marine products taken from outside its territorial waters by a vessel and/or produced or obtained by a factory ship registered, recorded, listed or licensed with the Party and flying its flag;
(g) products, other than products of sea fishing and other marine products, taken or extracted from the seabed, ocean floor or the subsoil of the continental shelf or the exclusive economic zone of any of the Party, provided that the Party or person has the right to exploit such seabed, ocean floor or subsoil in accordance to international law;
(h) used articles collected there which can no longer perform their original purpose nor are capable of being restored or repaired and which are fit only for disposal or for the recovery of parts or raw materials;
(i) waste or scrap resulting from utilisation, consumption or manufacturing operations conducted there, fit only for recovery of raw materials; and (j) products produced or obtained there exclusively from products referred to in subparagraphs (a) through (i) of this Article or from their derivatives, at any stage of production.
Article 3.4. Sufficient Working or Production
1. For the purposes of paragraph (b) of Article 3.2 (Originating Goods), a good shall be deemed to be originating if the good satisfies any of the following:
(a) a Change in Tariff Heading (CTH), which means that all non-originating materials used in the production of the good have undergone a change in tariff classification at the four-digit level; or
(b) a Qualifying Value Content (QVC) not less than 35% of the Ex-Works value.
2. Notwithstanding paragraph 1, if the good falls within the tariff subheadings included in the Product Specific Rules (PSR) list in Annex 3A (Product Specific Rules), then the good shall satisfy the specific rule detailed therein.
3. For the purposes of paragraph I of this article, the QVC shall be calculated as follows:
QVC(ExWorks) = ExWorks Value -V. N. M / ExWorks Value * 100
where:
QVC is the qualifying value content of a good expressed as a percentage;
Ex-Works Value is the price paid for the good ex-works to the manufacturer in the Party in whose undertaking the last working or processing is carried out, provided the price includes the value of all the materials used, minus any internal taxes which are, or may be, repaid when the good obtained is exported; and
V.N.M is the customs value of the non-originating materials at the time of importation or the earliest ascertained price paid or payable in the Party where the production takes place for all non-originating materials, parts or produce that are acquired by the producer in the production of the good. When the producer of a good acquires non-originating materials within that Party, the value of such materials shall not include freight, insurance, packing costs and any other costs incurred in transporting the material from the supplier's warehouse to the producer's location.
Article 3.5. Intermediate Goods
For a non-originating material that undergoes sufficient production in the territory of a Party as provided in Article 3.4 (Sufficient Working or Production), the resulting good shall be considered as originating and no account shall be taken of the non-originating material contained therein when that good is used in the subsequent production of another good.
Article 3.6. Accumulation
1. An originating good of a Party which is used in the processing or production in the territory of the other Party as material for finished goods shall be deemed as a material originating in the territory of the latter Party where the working or processing of the finished goods has taken place.
2. Notwithstanding subparagraph I, an originating material from a Party that does not undergo processing beyond the minimal or insufficient operations listed in Article 3.8 (Insufficient Operations) in the other Party shall retain its originating status of the former Party.
3. The Joint Committee may agree to review this Article with a view to providing for other forms of accumulation for the purposes of qualifying goods as originating goods under this Agreement.
Article 3.7. Tolerance
1. Notwithstanding Article 3.4 (Sufficient Working or Production), a good will be considered to have undergone a change in tariff classification if:
(a) the value ofali non-originating materials that are used in the production ofthe good and that do not undergo the applicable change in tariff classification does not exceed 20% of the Ex-Works price of the good; or
(b) for goods provided for in Chapters 50 to 63 of the HS code, the weight or value of all non-originating materials that are used in the production of the good and that do not undergo the applicable change in tariff classification does not exceed 20% of the weight or the Ex-Works price of the good;
and the good specified in subparagraphs (a) or (b) meets all other applicable requirements of this Chapter for qualifying as an originating good.
2. The value of non-originating materials referred to in paragraph l shall be included in the value of the non-originating materials for any applicable value added content requirement.
Article 3.8. Insufficient Operations
1. Regardless of whether or not the requirements of Article 3.4 (Sufficient Working or Production) are satisfied, a good shall not be considered to be originating in the territory of a Party if the following operations are undertaken exclusively by themselves or in combination in the territory of that Party:
(a) operations to ensure the preservation of products in good condition during transport and storage such as drying, freezing, ventilation, chilling and like operations;
(b) sifting, classifying, washing, cutting, slitting, bending, coiling or uncoiling, sharpening, simple grinding, slicing;
(c) cleaning, including removal of oxide, oil, paint or other coverings;
(d) simple painting and polishing operations;
(e) testing or calibration;
(f) placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;
(g) simple mixing of goods, whether or not of different kinds;
(h) simple assembly of parts of products to constitute a complete good or disassembly of products into parts;
(i) changes of packing, unpacking or repacking operations, and breaking up and assembly of consignments;
(j) affixing or printing marks, labels, logos and other like distinguishing signs on goods or their packaging;
(k) husking, partial or total bleaching, polishing and glazing of cereals and rice; and
(I) mere dilution with water or another substance that does not materially alter the characteristics of the goods.
2. For the purposes of paragraph I above, the term "simple" will be defined as follows:
(a) "Simple" generally describes an activity which does not need special skills, machines, apparatus or equipment especially produced or installed for carrying out the activity; and
(b) "Simple mixing" generally describes an activity which does not need special skills, machine, apparatus or equipment especially produced or installed for carrying out the activity. However, simple mixing does not include chemical reaction. Chemical reaction means a process (including a biochemical process) which results in a molecule with a new structure by breaking intramolecular bonds and by forming new intramolecular bonds or by altering the spatial arrangement of atoms in a molecule.
Article 3.9. Indirect Materials
Any indirect material used in the production of a good shall be treated as originating material, irrespective of whether such indirect material is originating.
Article 3.10. Accessories, Spare Parts, Tools
1. Accessories, spare parts, tools and instructional or other information materials delivered with a good that form part of the good's standard accessories, spare parts, tools and instructional or other information materials shall be regarded as a part of the good, and shall be disregarded in determining whether or not all the non-originating materials used in the production of the originating goods undergo the applicable change in tariff classification provided that:
(a) the accessories, spare parts, tools and instructional or other information materials are classified with and not invoiced separately from the good; and
(b) the quantities and value of the accessories, spare parts, tools and instructional or other information materials presented with the good are customary for the good.
2. Notwithstanding paragraph 1, if the goods are subject to a QVC requirement, the value of the accessories, spare parts, tools and instructional or other information materials shall be taken into account as originating or non-originating materials, as the case may be, in calculating the qualifying value content of the goods.
Article 3.11. Packaging Materials and Containers for Retail Sale
1. Each Party shall provide that packaging materials and containers in which a good is packaged for retail sale, if classified with the good, according to Rule 5 of the General rules for the interpretation of the Harmonized System, shall be disregarded in determining whether all the non-originating materials used in the production of the good undergo the applicable change in tariff classification set out in any applicable product-specific rules.
2. If the good is subject to qualifying a value content requirement, the value of such packaging materials and containers shall be taken into account as originating or non-originating materials, as the case may be, in calculating the qualifying value content of the good.
Article 3.12. Packaging Materials and Containers for Shipment
Each Party shall provide that packing materials and containers for shipment are disregarded in detennining whether a good is originating.
Article 3.13. Fungible Goods and Materials
1. Each Party shall provide that the determination of whether fungible goods or materials are originating goods shall be made through physical segregation of each good or material, or, in case of any difficulty, through the use of any inventory management method, such as averaging, last-in, first-out or first-in, first out, recognised in the generally accepted accounting principles of the Party in which the production is performed, or otherwise accepted by the Party in which the production is performed.
2. Each Party shall provide that an inventory management method selected under paragraph 1 of this Article for particular fungible goods or materials shall continue to be used for those fungible goods or materials throughout the fiscal year of the Party that selected the inventory management method.
Article 3.14. Sets of Goods
Sets, as defined in General Rule 3 of the Hannonized System (HS), shall be regarded as originating when all component goods are originating. However, when a set is composed of originating and non-originating products, the set as a whole shall be regarded as originating, provided that the value of non-originating products does not exceed 25% of the Ex woks price of the set.
Section B. SECTION B Territoriality and Transit
Article 3.15. Principle of Territoriality
1. The conditions for acquiring originating status set out in Article 3.2 (Originating Goods) must be fulfilled without interruption in the territory of one or both of the Parties.
2. Where originating goods exported from the territory of a Party to a non-Party return to the exporting Party, they must be considered as non-originating, unless it can be demonstrated to the satisfaction of the customs authorities that:
(a) the returning goods are the same as those exported; and
(b) the goods have not undergone any operation beyond that necessary to preserve them in good condition while in that non-Party or while being exported.
Article 3.16. Outward Processing
1. Notwithstanding Article 3. 15 (Principle of Territoriality), the acquisition oforiginating status pursuant to Article 3.2 (Originating Goods) shall not be affected by working or processing done outside a Party on materials exported from a Party and subsequently re-imported there, provided:
(a) the said materials are wholly obtained in any of the Parties or have undergone working or processing beyond the operations referred to in Article 3.8 (Insufficient Operations) prior to being exported; and
(b) it can be demonstrated to the satisfaction of the customs authorities that:
(i) the re-imported goods have been obtained by working or processing the exported materials; and
(ii) the total added value acquired outside a Party by applying the provisions of this Article does not exceed 20% of the Ex-Works price ofthe end product for which originating status is claimed.
(iii) The conditions set out in Article 3.7 (Tolerance) shall not apply to the said material as referred to in subparagraph (a);
2. For the purposes of applying the provisions of paragraph 1, "total added value" shall be taken to mean all costs arising outside the Parties, including the value of the materials incorporated there.
3. Any working or processing of the kind covered by the provisions of this Article and done outside the exporting Party shall be done under outward processing arrangements or similar arrangements.
Article 3.17. Transit and Transshipment
1. Each Party shall provide that an originating good retains its originating status if the good has been transpotted directly to the importing Party without passing through the territory of a non-Party.
2. Notwithstanding paragraph 1, each Party shall provide that an originating good retains its originating status if it transits through or is stored in temporary warehousing, in one or more intermediate non-Parties, provided that the good:
(a) remained under customs control in the territory of the non-Party or non-Parties; and
(b) has not undergone any operation there other than unloading, reloading, repackaging, split from bulk, labelling or any operation required to keep it in good condition.
3. An importer shall upon request supply appropriate evidence to the customs authorities of the importing Party that the conditions set out in paragraph 2 have been fulfilled.
Article 3.18. Free Economic Zones or Free Zones
1. Both Parties shall take all necessary steps to ensure that originating goods traded under cover of a proof of origin which in the course of transport use a free zone situated in their territory, are not substituted by other goods and do not undergo handling other than normal operations designed to prevent their deterioration.
2. Goods produced or manufactured in a free zone situated within a Party shall be considered as originating goods in that Party when exported to the other Party provided that the treatment or processing is in conformity with the provisions of this Chapter and supported by a proof or origin.
Article 3.19. Third Party Invoicing
I. The customs authorities in the importing Party shall not reject a certificate of origin solely for the reason that the invoice was not issued by the exporter or producer of the good, provided that the good meets the requirements in this Chapter. 2. The exporter of the good shall indicate "third party invoicing" and such information as name and country of the company issuing rhe invoice shall appear in in the appropriate field as detailed in Annex 38 (Specimen of Georgia-UAE Certificate of Origin and Application for a Georgia-UAE Certificate of Origin).
Section C. Origin Certification
Article 3.20. Proof of Origin
1. Goods originating in a Party shall, on importation into the other Party, benefit from preferential tariff treatment under this Agreement on the basis of a Proof of Origin.
2. Any of the following shall be considered as a Proof of Origin:
(a) a paper format certificate of origin in soft or hard copy issued by a competent authority as per Article 3.21 (Certificate of Origin in Paper Format);
(b) an Electronic Certificate of Origin (E-Certificate) issued by a competent authority and exchanged by a mutually developed electronic system m accordance with Article 3.22 (Electronic Data Origin Exchange System);
(c) an origin declaration made out by an approved exporter in accordance with Article 3.23 (Origin Declaration).
3. Each Party shall provide that a Proof of Origin, which shall be completed in the English language remains valid for one year from the date on which it is issued.
Article 3.21. Certificate of Origin In Paper Format
1. A Certificate of Origin in paper format shall:
(a) be in a standard A4 white paper in accordance with the attached Form set out in Annex 3B (Specimen of Georgia-UAE Certificate of Origin and Application for a Georgia-UAE Certificate of Origin);