(b) their quantities are considered as normal for this product.
2. Accessories, spare parts, tools and instruction and information material shall be considered as materials of the product in calculating the value of non-originating materials used in its production.
Article 3.10. Neutral Elements
When determining whether a product is an originating product, the origin of neutral elements used in the production, testing or inspection of the product but not physically incorporated into the product by themselves, shall not be taken into account. Such neutral elements include, but are not limited to the following:
(a) fuel, energy, catalysts and solvents;
(b) equipment, devices and supplies used for testing or inspecting the products; (c) gloves, glasses, footwear, clothing, safety equipment and supplies;
(d) tools, dies and moulds;
(e) spare parts and materials used in the maintenance of equipment and buildings; and
(f) lubricants, greases, compounding materials and other materials used in production or used to operate equipment and buildings.
Article 3.11. Fungible Materials
1. Where originating and non-originating fungible materials are used in the working or processing of a product, the determination of whether the materials used are originating may be determined on the basis of an inventory management system.
2. For the purpose of paragraph 1, "fungible materials" means interchangeable materials that are of the same kind and commercial quality, which cannot be distinguished from one another once they are incorporated into the finished product.
3. The inventory management system shall be based on generally accepted accounting principles applicable in the Party in which the product is manufactured and ensure that no more final products receive originating status than would have been the case if the materials had been physically segregated. A producer using such a system shall keep records of the operation of the system that are necessary to verify compliance with the provisions of this Chapter.
4. For the purpose of this Article, a Party may require an inventory management system in accordance with the legislation of that Party.
Article 3.12. Principle of Territoriality
The conditions for acquiring originating status set out in Articles 3.2 to 3.10 shall be fulfilled without anyinterruption ina Party.
Article 3.13. Direct Transport
1. Preferential tariff treatment under this Agreement shall only be granted to originating products which are transported directly between the Parties.
2. Notwithstanding paragraph 1, originating products which are transported through the territories of nonparties may still be considered as being transported directly between the Parties, provided that:
(a) they do not undergo operations other than unloading, reloading, or any operation confined to preserve themingoodcondition;and
(b) they remain under customs control in those nonparties. Consignments of originating products may be split up in nonparties for further transport subject to the fulfilment of conditions listed in subparagraphs (a) and (b).
3. For the purpose of paragraph 1, an originating product may be transported by pipeline across territories of nonparties.
4. The customs authorities of the importing Party may require that the importer of the above products shall submit sufficient evidence to prove to their satisfaction that the conditions set out in paragraphs 2 and 3 have been fulfilled.
Section II. Implementation Procedures
Article 3.14. Documentary Evidence of Origin
To qualify for preferential tariff treatment under this Agreement, either of the following documentary evidences of origin shall be submitted to the customs authority of the importing Party:
(a) Certificate of Origin referred to in Article 3.15 ;or
(b) an Origin Declaration by an Approved Exporter as referred to in Article 3.16.
Article 3.15. Certificate of Origin
1. A Certificate of Origin shall be issued by the authorised body of the exporting Party.
2. The Certificate of Origin shall be issued before or at the time of exportation whenever the products to be exported can be considered originating in that Party subject to the provisions of this Chapter. The exporter or, in accordance with the domestic legislation, his authorised representative shall submit a written application for the Certificate of Origin together with appropriate supporting documents proving that the products to be exported qualify for the issuance of a Certificate of Origin.
3. In exceptional cases where a Certificate of Origin has not been issued before or at the time of exportation, the Certificate of Origin may be issued retrospectively bearing the remark "ISSUED RETROSPECTIVELY".
4. The Certificate of Origin, based on the formats as set out in Annex III shall be completed in English and duly signed and stamped. A Certificate of Origin shall be valid only within twelve months from the date of its issuance.
5. For cases of theft, loss or accidental destruction of a Certificate of Origin, the exporter or producer may make a written request to the authorised bodies of the exporting Party for issuing a certified copy, provided that the original copy previously issued has been verified not to be used. The certified copy shall bear the words either "CERTIFIED TRUE COPY of the original Certificate of Origin number ___ dated ___" or "DUPLICATE" together with the reference number and the date of issuance of the original Certificate of Origin. The certified copy shall be valid during the term of validity of the original Certificate of Origin.
6. Certificates of Origin which are submitted to the customs authority of the importing Party after the validity may be accepted when failure to observe the time limit is due to force majeure or other valid causes beyond the control of the exporter or importer.
Article 3.16. Origin Declaration by Approved Exporter
1. A Party may implement an Approved Exporter system under this Agreement, which allows the Approved Exporter to complete an Origin Declaration. The Approved Exporter shall be approved and administered by the exporting Party in accordance with its domestic legislation.
2. An Approved Exporter shall complete the Origin Declaration according to the text as provided for in Annex IV. The Origin Declaration shall contain the registration number of the Approved Exporter and the serial number of the Origin Declaration. An Origin Declaration shall be produced in accordance with the laws and regulations of the exporting Party by an Approved Exporter by typing, stamping or printing on the invoice or other commercial documents, as deemed valid by the importing customs administration, which describe the product concerned in such a detail so as to render it identifiable.
3. An Origin Declaration shall be valid only within twelve months from the date of the issuance of the invoice or other commercial documents, as deemed valid by the importing customs administration.
4. Before 31st of March each year, the exporting Party shall provide the importing Party with information on the name and registration number of each approved exporter, along with corresponding serial numbers of all the Origin Declaration made in the preceding year. If any discrepancies are discovered because of this information a Party shall inform the other Party of such discrepancies for further investigation or clarification on behalf of that Party. To facilitate the communication of the information above, the Parties shall work towards establishing an electronic system on the exchange of that information.
Article 3.17. Retention of Origin Documents
1. Each Party shall require its producers, exporters and importers to retain documents related to the origin of the products as well as the fulfilment of the other requirements of this Chapter for at least three years.
2. Each Party shall require that its authorised bodies retain copies of Certificates of Origin and other documentary evidence of origin for at least three years.
3. Exporters and importers benefitting from this Agreement shall, within the framework of this Agreement and subject to domestic legislation of the exporting Party and importing Party respectively, comply with the requirements of that Party and submit, at their request, supporting documents regarding the fulfilment of the requirements of this Chapter.
Article 3.18. Requirements Regarding Importation
1. Each Party shall grant preferential tariff treatment in accordance with this Agreement to originating products imported from the other Party on the basis of a documentary evidence of origin as defined in Article 3.14.
2. In order to obtain preferential tariff treatment, the importer shall, in accordance with the procedures applicable in the importing Party, request preferential tariff treatment at the time of importation of an originating product and submit the documentary evidence of origin specified in Article 3.14, as well as other documentary evidence upon requirements of the customs authorities of the importing Party.
3. For the purpose of paragraph 2, a documentary evidence of origin shall be submitted to the customs authorities of the importing Party within 12 months from the date of issuance.
4. If the importer is not in possession of a documentary evidence of origin at the time of importation, the importer may, in accordance with the domestic legislation of the importing Party, make a claim for preferential tariff treatment at the time of importation and present the documentary evidence of origin and, if required, other documentation relating to the importation within a period as specified in the legislation of the importing Party. The customs authorities of the importing Party shall complete the import formalities in accordance with the domestic legislation.
Article 3.19. Waiver of Documentary Evidence of Origin
1. For the purpose of granting preferential tariff treatment under this Chapter, a Party may waive the requirements for the presentation of a documentary evidence of origin and grant preferential tariff treatment to:
(a) any consignment of originating products of a value not exceeding US$ 600 or its equivalent amount in the Party's currency; or
(b) otheroriginating productsasprovided under itsdomestic legislation.
2. Waivers provided for in paragraph 1 shall not be applicable when it is established by the customs authorities of the importing Party that the importation forms part of a series of importations that may reasonably be considered to have been undertaken or arranged for the purpose of avoiding the submission of a formal documentary evidence of origin.
Article 3.20. Origin Verification
1. To ensure the effective application of this Chapter, the Parties shall assist each other to carry out verification on the authenticity of the documentary evidence of origin, the correctness of the information given therein, the originating status of the products concerned, and the fulfilment of any other requirements under this Chapter.
2. The competent governmental authorities of the exporting Party shall carry out verifications referred to in paragraph 1 upon request of the customs authority of the importing Party.
3. The importing Party shall submit the verification request to the exporting Party within 36 months from the completion or issuance of the documentary evidence of origin. The exporting Party is not obliged to conduct verifications based on verification requests received after that deadline.
4. The verification request shall include a copy of the documentary evidence of origin and, if appropriate, any other document or information giving reason to believe that the documentary evidence of origin is invalid. The reasons for the request shall be specified.
5. The customs authorities of the importing Party may, in accordance with their domestic legislation, suspend preferential tariff treatment or require payment of a deposit equivalent to the full amount of duties on a product covered by a documentary evidence of origin until the verification procedure has been accomplished.
6. The competent governmental authorities of the exporting Party may request evidence, carry out inspections at exporter's or producer's premises, check the exporter's and the producer's accounts and take other appropriate measures to verify compliance with this Chapter.
7. The requested Party shall notify the requesting Party of the results and findings of the verification within six months from the date of the verification request, unless the Parties agree upon another time frame on justified grounds. If the requesting Party receives no reply within six months or another time frame as agreed upon by the Parties, or if the reply does not state clearly whether the documentary evidence of origin is valid or whether a product is an originating product, the requesting Party may deny preferential tariff treatment to the product covered by the documentary evidence of origin concerned.
Article 3.21. Denial of Preferential Tariff Treatment
Except as otherwise provided in this Chapter, the importing Party may deny a claim for preferential tariff treatment, if:
a) the documentary evidence of origin does not meet the requirement of this Chapter;
b) the compliance with Article 3.13 is not proven;
c) it is proven based on the results of the origin verification in the exporting Party that the documentary evidence of origin is not authentic or not accurate;
d) in a case according to paragraph 7 of Article 3.20; or
e ) the products do not meet the requirements of this Chapter.
Article 3.22. Notifications
1. Prior to the entry into force of this Agreement, the Parties shall provide each other with:
a) for the purpose of Article 3.15, the names and addresses of the authorised bodies issuing the certificate of origin and specimen impressions of official seals used by such authorised bodies. Any change in names, addresses, or official seals shall be promptly notified to the customs administration of the importing Party;
b) for the purpose of Article 3.16, the names, registration numbers and contact details of the Approved Exporters. Any change in the information above shall be advised promptly to the other Party;
(c) the addresses of the competent governmental authorities of the Parties responsible for verifications referred to in Article 3.20 and other issues related to the implementation or application of this Chapter; and
(d) information on the interpretation, application and administration of this Chapter.
Article 3.23. Confidentiality
Subject to the domestic legislation of each Party, all information which is specified by a Party as confidential or provided on a confidential basis shall not be disclosed without the explicit permission of the person or authority providing it.
Article 3.24. Sub-Committee on the Implementation of Origin Matters
1. The Sub-Committee on the Implementation of Origin Matters (hereinafter referred to in this Article as the "SubCommittee") consisting of representatives of both Parties is hereby established under the Joint Committee.
2. The Sub-Committee shall deal with the following issues:
(a) monitor and review of measures taken and implementation of commitments;
(b) exchange of information and review developments;
(c) other matters as the Parties may agree;
(d) other matters that are referred to the SubCommittee by the Joint Committee; and
(e) make recommendations and report to the Joint Committee as necessary.
3. The Sub-Committee shall be co-chaired by representatives of the customs administrations of the Parties. The host Party shall act as the chair. The chairperson shall prepare a provisional agenda for each meeting of the SubCommittee in consultation with the other Party and forward it to the other Party before the meeting.
4. The Sub-Committee shall meet as often as necessary upon instruction of the Joint Committee or as agreed by the Parties. The meeting shall take place either in China or Switzerland as mutually agreed by the Parties.
5. The Sub-Committee shall prepare a written report on the results of each meeting.
Article 3.25. Products Transported En Route after Exportation
The provisions of this Chapter may be applied to products which, on the date of entry into force of this Agreement, are transported en route after exportation, including transit, before the arrival in the other Party. For such products, documentary evidence of origin may be completed retrospectively up to six months after the entry into force of this Agreement, provided that the provisions of this Chapter and in particular Article 3.13 have been fulfilled.
Chapter 4. Customs Procedures and Trade Facilitation
Article 4.1. Scope
This Chapter applies to the customs territory of China and the customs territory of Switzerland as defined in Article 2.1.
Article 4.2. Definitions
For the purposes of this Chapter:
(a) “customs administration” means:
i) in relation to China, the General Administration of Customs; and
ii) in relation to Switzerland, the Federal Customs Administration.
(b) “customs law” means the statutory and regulatory provisions of a Party relating to the importation, exportation, movement or storage of goods, the administration and enforcement of which are specifically charged to the customs, and any regulations made by the customs under their statutory powers;
(c) “customs procedures” means the treatment applied by the customs administration of a Party to goods and the means of transport, which are subject to that Party’s customs law;
(d) “Customs Valuation Agreement” means the Agreement on Implementation of Article VII of the General Agreement on Tariff and Trade 1994, which is a part of the WTO Agreement; and
(e) “means of transport” means any vessels, road vehicles, aircrafts, railway rolling stock and packanimals which enter or leave the territory carrying persons and/or goods.
Article 4.3. General Principles
The Parties, aiming to serve the interests of their respective business communities and to create a trading environment allowing them to benefit from the opportunities offered by this Agreement, agree that in particular the following principles are the basis for the development and administration by competent authorities of trade facilitation measures: (a) transparency, efficiency, simplification, harmonisation and consistency of tradeprocedures; (b) promotionofinternationalstandards; (c) consistencywithmultilateralinstruments; (d) the best possible use ofinformationtechnology; (e) high standards of public service; (f) governmental-controls based on risk management; (g) cooperation within each party among customs and other borderauthorities; (h) consultations between the Parties and their respective business communities; and (i) assurance of trade security.
Article 4.4. Transparency
1. Each Party shall promptly publish on the Internet, and as far as practicable in English, all laws, regulations and rules of general application relevant to trade in goods between China and Switzerland.
2. Each Party shall establish enquiry points for customs and other matters covered under this Chapter, which may be contacted as far as practicable in English via the Internet.
3. Each Party shall consult its respective business community on its needs with regard to the development and implementation of trade facilitation measures, noting that particular attention should be given to the interests of small and medium-sized enterprises.
4. Each Party shall publish in advance, and in particular on the Internet, draft laws and regulations of general application relevant to international trade, with a view to affording the public, especially interested persons, an opportunity to provide comments on them.
5. Each Party shall ensure that a reasonable interval is provided between the publication of laws and regulations of general application relevant to international trade in goods and their entry into force.
6. Each Party shall administer in a uniform, impartial and reasonable manner all its laws, regulations and rules relevant to international trade in goods.
Article 4.5. Cooperation
1. The Parties may identify, and submit to the Joint Committee for consideration, further measures with a view to facilitating trade between the Parties, as appropriate.
2. The Parties shall promote international cooperation in relevant multilateral fora on trade facilitation. The Parties shall review relevant international initiatives on trade facilitation in order to identify, and submit to the Joint Committee for consideration, further areas where joint action could contribute to their common objectives.
Article 4.6. Advance Rulings
1. A Party shall in a reasonable, timebound manner, issue a binding, written advance ruling (3) upon submission of a written request that contains all necessary information to an importer, producer or exporter (4) with regard to:
(a) tariff classification of a product;
(b) the method of the transaction value to be used for determining the customs value under a particular set of facts;
(c) the rules of origin it will accord to a product;and
(d) such other matters as the Parties may agree.
2. A Party that declines to issue an advance ruling shall promptly notify the requester in writing, setting forth the basis for its decision to decline to issue the advance ruling.
3. Each Party shall provide that advance rulings take effect on the date they are issued, or on another reasonable date specified in the ruling, provided that the facts or circumstances on which the ruling is based, remain unchanged.
4. The Parties may limit the validity of advance rulings to a period determined by domestic legislation.
5. Each Party shall endeavour to make information on advance rulings which it considers to be of significant interest to other traders, publicly available, taking into account the need to protect confidential information.
Article 4.7. Simplification of International Trade Procedures
1. Each Party's procedures related to customs controls and international trade shall be simple, reasonable, objective and impartial.
2. The Parties shall limit controls, formalities and the number of documents required in the context of trade in goods between the Parties to those necessary and appropriate to ensure compliance with legal requirements, thereby simplifying, to the greatest extent possible, the related procedures.
3. The importing Party shall not require an original or a copy of the export declaration from the importer.
4. The Parties shall use efficient trade procedures, based, as appropriate, on international standards, aiming to reduce costs and unnecessary delays in trade between them, in particular the standards and recommended practices of the World Customs Organisation (hereinafter referred to as the "WCO"), including the principles of the revised International Convention on the Simplification and Harmonisation of Customs Procedures (Revised Kyoto Convention).
5. EachPartyshalladoptormaintainproceduresthat:
(a) provide for advance electronic submission and processing of information before the physical arrival of goods in order to expedite their clearance;
(b) may allow importers to obtain the release of goods prior to meeting all import requirements of that Party if the importer provides sufficient and effective guarantees and where it is decided that neither further examination, physical inspection nor any other submission is required; and
(c) provide for guarantee to be discharged without delay when it is no longer required.
Article 4.8. Customs Valuation
The Parties shall apply Article VII of the GATT 1994 and the Customs Valuation Agreement to goodstraded betweenthem.5
Article 4.9. Tariff Classification
The Parties shall apply the International Convention on the Harmonized Commodity Description and Coding System to goods traded between them.
Article 4.10. Competent Customs Offices
1. The Partiesshalldesignate the customs offices at which goods may be presented or cleared. In determining the competence and location of these offices and their hours 5 Switzerland applies customs duties based on weight or quantity rather than ad Valorem duties (notification to the WTO: G/VAL/N/1/CHE/1of28 August 1995). of business, the factors to be taken into account shall include in particular the requirements of trade.
2. Each Party shall, subject to the availability of resources, perform customs controls and procedures outside the designated hours of business or away from customs offices if so requested by a trader for valid reasons. Any expenses chargeable by the customs shall be limited to the approximate cost of the services rendered.
Article 4.11. Risk Management
1. EachPartyshalldetermine which persons, goods or means of transport are to be examined and the extent of the examination, based on risk management.
2. In identifying and addressing risks related to the entry, exit, transit, transfer or end-use of goods moved between the customs territory of a Party and the other Party, or the presence of goods that are not in free circulation, the Parties shall systematically apply objective risk management procedures and practices.
3. Risk management shall be applied in such a manner that it does not create arbitrary or unjustifiable discrimination under the same conditions or disguised restriction on international trade.
4. Each Party's procedures related to customs controls and international trade, including its documentary examinations, physical examinations or post-audit examinations, shall not be more onerous than necessary in order to limit its exposure to these risks.
5. The Parties shall adopt effective and efficient customs controls with a view to expediting the release of goods.
Article 4.12. Customs Audit
1. Customs audit is the process whereby the examination and verification of the goods is conducted by customs after release of the goods within a specified period of time.