2. Paragraph 1 shall not apply to imports, including staggered imports, that are made or intended to be made for the purpose of evading compliance with the certification of origin requirements of this Chapter.
Article 4.24. Invoicing by a Third Country Operator
1. Goods that comply with the applicable requirements of this Chapter shall retain their originating status even when invoiced by traders in a non-Party.
2. The certificate of origin shall indicate in the "Remarks" field when a good is invoiced by a trader in a non-Party.
Article 4.25. Procedures to Verify Origin
1. The customs authority of the importing Party may, upon request, request information from the competent authority of the exporting Party for the purpose of verifying the authenticity of the certificates of origin or the veracity of the information contained therein.
2. The competent authority of the exporting Party shall have a period of 60 days following the date of receipt of the request to provide the information requested.
3. In the event that the customs authority of the importing Party does not receive the requested information and documentation within the established period or that the exporting Party does not recognize the authenticity of the certificates of origin or the veracity of the information contained therein, preferential tariff treatment may be denied to the goods covered by the certificates of origin subject to review.
4. To determine whether a good that is imported from the territory of the other Party with preferential tariff treatment qualifies as originating, the importing Party may, through its competent authority, verify the origin of the good through one or more of the following procedures:
(a) written questionnaires and requests for information addressed to the exporter or producer of the good in the territory of the other Party;
(b) verification visits to the exporter or producer in the territory of the other Party for the purpose of examining the records and documents referred to in Article 4.22, in addition to inspecting the production facilities and processes, including the materials or products used in the production of the good; and
(c) such other procedures as the Parties may agree.
5. For the purposes of this Article, the customs authority of the importing Party shall inform the importer of the verification process it is carrying out, once it has begun.
6. Likewise, the importer shall have a period of 30 days following the date of notification of the initiation of the verification of origin process, to provide the documents, evidence or statements that he considers pertinent, and may request in writing to the customs authority, only once, an extension, which may not exceed 30 days. In the event that the importer fails to submit such documentation, it shall not be considered sufficient reason to deny preferential tariff treatment.
7. In accordance with the provisions of paragraph 4, written questionnaires and requests for information shall contain:
(a) the name, title and address of the competent authority for the verification of origin requesting the information;
(b) the name and address of the exporter or producer from whom the information and documentation is requested;
(c) the description of the information and documents required; and
(d) the legal basis for the requests for information or written questionnaires.
8. An exporter or producer receiving a written questionnaire and requests for information under this Article shall respond and return it within 30 days from the date on which it is received. During such period, the exporter or producer may, on a single occasion, request in writing to the customs authority of the importing Party an extension thereof, which may not exceed 30 days.
9. The customs authority of the importing Party may request additional information from the exporter or producer, even if it has received the written questionnaire or the requested information referred to in subparagraph 4 (a). In this case, the exporter or producer shall have 30 days following the date of notification of the request to respond.
10. In the event that the exporter or producer does not return the written questionnaire duly answered within the period granted or during the extension thereof, or if the information provided therein does not provide evidence of the origin of the good, the importing Party shall deny preferential tariff treatment to the goods subject to verification, notifying the exporter or producer of its determination to deny preferential tariff treatment, including the facts and the legal basis thereof.
11. Before conducting a verification visit pursuant to subparagraph 4(b), the competent authority of the importing Party shall be required to notify in writing its intention to conduct the verification visit. The notification shall be sent to the exporter or producer to be visited, and to the customs authority of the Party in whose territory the visit is to take place.
12. The notification referred to in paragraph 11 shall contain:
(a) the name and address of the customs authority making the notification;
(b) the name of the exporter or producer to be visited;
(c) the date and place of the proposed verification visit;
(d) the purpose and scope of the proposed verification visit, making specific mention of the good or goods to be verified;
(e) the names and positions of the officials who will carry out the verification visit; and
(f) the legal basis for the verification visit.
13. If within 30 days following the date of receipt of the notification of the proposed verification visit pursuant to paragraph 11, the exporter or producer does not give its written consent to the customs authority of the importing Party to the conduct of the verification visit, the importing Party shall deny preferential tariff treatment to the goods that would have been the subject of the verification visit and the certificate of origin covering such goods shall be considered invalidated, notifying in writing the exporter or producer, the importer and the customs authority of the exporting Party of its determination to deny preferential tariff treatment, including the facts and legal basis.
14. Each Party shall provide that where the exporter or producer receives a notification under paragraph 11 it may, within 15 days of the date of receipt of the notification, request, on a one-time basis, an extension of the proposed verification visit for a period of not more than 30 days from the date proposed under paragraph 12, or for such longer period as the Parties may agree, within 15 days of the date of receipt of the notification, to request an extension of the proposed verification visit for a period of not more than 30 days from the date proposed under paragraph 12, or for such longer period as agreed upon by the Parties. For this purpose, the competent authority of the importing Party and of the exporting Party shall be notified of the extension of the visit.
15. A Party may not deny preferential tariff treatment solely on the basis of a request for an extension of the verification visit, as provided in paragraph 14.
16. Each Party shall allow the exporter or producer whose goods are the subject of a verification visit to designate 2 observers to be present during the visit, provided that they act solely in that capacity. Failure to designate observers by the exporter or producer shall not result in an extension of the visit.
17. The importing Party may deny preferential tariff treatment to a good subject to a verification of origin when, in the course of a verification visit, the exporter or producer of the good fails to make available to the customs authority of the importing Party the records and documents referred to in Article 4.22.
18. Once the verification visit is concluded, the officials of the customs authority of the importing Party shall sign a record jointly with the producer or exporter and, if applicable, with the observers. Said minutes shall record the information and documentation gathered by the customs authority of the importing Party, as well as any other fact considered relevant for the determination of the origin of the goods subject to verification and shall include the name of the officials in charge of the visit, the name of the person responsible for attending the visit for the company and the name of the observers. In the event that the producer or exporter, or the observers, refuse to sign the minutes, this fact shall be recorded. Refusal to sign the minutes by the exporter, producer or observers shall not invalidate the minutes.
19. The competent authority of the importing Party shall, within a period not exceeding 1 year following the date of receipt of the notification of the initiation of the verification process, notify by means of a written resolution, the exporter or producer whose goods have been subject to verification of origin, in which the origin of the goods is determined, as well as the legal grounds and findings of fact. The determination shall be made known to the importer.
20. Each Party shall provide that if within the term indicated in paragraph 19 the competent authority of the importing Party does not issue the determination of origin, the goods subject to the verification of origin shall be considered originating.
21. Each Party shall provide that, if as a result of the determination of origin referred to in paragraph 19, it is established that the goods are not originating, the certificate of origin shall be considered invalid.
22. Where a Party's verification establishes that the exporter or producer has falsely or unjustifiably certified or declared more than once that a good qualifies as originating, the importing Party may suspend preferential tariff treatment for identical goods exported or produced by that person until that person proves that it complies with the provisions of this Chapter.
23. The importing Party shall not apply a ruling under paragraph 19 to an importation made before the date on which such ruling takes effect, provided that:
(a) the competent authority from whose territory the good has been imported has made an advance ruling under Article 5.11 (Advance Rulings), or any other ruling on tariff classification or value of materials, on which a person is entitled to rely; and
(b) such rulings are prior to the notification of the initiation of the verification of origin.
For the purposes of this Article, any written communication sent by the customs authority of the importing Party to the exporter or producer shall be made by means of:
(a) registered mail or other forms with acknowledgement of receipt confirming receipt of the documents or communications, or.
(b) such other form as the Parties may agree through the Committee on Rules of Origin, Customs Procedures, Trade Facilitation, and Customs Cooperation.
Article 4.26. Review and Challenge
Each Party shall ensure with respect to its administrative acts on matters covered by this Chapter that producers, exporters, or importers in its territory have access to:
(a) an instance of administrative review independent of the instance that issued such administrative act, and.
(b) a judicial review body for administrative acts.
Article 4.27. Confidentiality
1. Where a Party provides information to the other Party under this Chapter and designates it as confidential, the other Party shall maintain the confidentiality of such information in accordance with its domestic law.
2. The Party providing the information may require the other Party to provide a written statement to the effect that the information shall be kept confidential and shall be used only for the purposes specified in the other Party's request for information.
3. A Party may refuse to provide information requested by another Party where that Party has not acted in accordance with paragraph 1.
4. Each Party shall, in accordance with its domestic law, adopt or maintain procedures under which confidential information submitted by the other Party, including information the disclosure of which would prejudice the competitive position of the person providing the information, is protected from disclosure contrary to the terms of this Article.
Article 4.28. Sanctions
Each Party shall establish or maintain criminal, civil, or administrative penalties for violations of its laws and regulations relating to the provisions of this Chapter.
Article 4.29. Committee on Rules of Origin, Customs Procedures, Trade Facilitation, and Customs Cooperation
1. The Parties establish a Committee on Rules of Origin, Customs Procedures, Trade Facilitation, and Customs Cooperation composed of representatives of each Party, which shall have competence over the provisions of this Chapter and Chapter 5 (Trade Facilitation and Customs Cooperation).
2. The functions of the Committee shall include:
(a) monitoring the implementation and administration of the Chapters referred to in paragraph 1;
(b) proposing to the Commission:
(i) adjustments and modifications to Annex 4.2, as a result of amendments to the Harmonized System or the evaluation of a request submitted by a Party, duly substantiated, that is due to changes in production processes or other matters related to the determination of the origin of a good;
(ii) any modification or interpretation of the provisions of the chapters referred to in paragraph 1; and
(iii) modifications to the format and instructions for the certificate of origin and the declaration of origin referred to in Article 4.18;
(c) resolve any dispute relating to tariff classification. If the Committee does not reach a decision on the matter, it may consult as appropriate with the World Customs Organization, whose recommendation shall be taken into consideration by the Parties; and
(d) deal with any other matter relating to the Chapters referred to in paragraph 1.
3. Unless the Parties agree otherwise, the Committee shall meet once a year, on the date and according to the agenda previously agreed by the Parties. The Parties shall determine those cases in which extraordinary meetings may be held.
4. The meetings may be held by any means agreed upon by the Parties, and when they are face-to-face, they shall be held alternately in the territory of each Party, and it shall be the responsibility of the host Party to organize the meeting.
Chapter 5. TRADE FACILITATION AND CUSTOMS COOPERATION
Article 5.1. Definitions
For the purposes of this Chapter, the following definitions shall apply:
competent authority:
(a) in the case of Mexico, the Secretaría de Hacienda y Crédito Público, and
(b) in the case of Panama, the National Customs Authority, or its successors;
requested authority: the competent authority from which cooperation or assistance is requested;
requesting authority: the competent authority requesting cooperation or assistance;
information: data, documents, reports or other communications in any format, including electronic, as well as copies certified or qualified as originals;
customs infringement means any violation or attempted violation of the customs legislation of each Party; and
customs legislation: the legal and administrative provisions, the application of which is the responsibility of the competent authorities in the territory of the Parties, governing the import, export, transit of goods or any other customs procedure, including measures of prohibition, restriction and control.
Section A. Trade Facilitation
Article 5.2. Publication
1. Each Party shall publish, including on the Internet, its legislation, regulations, and administrative procedures of a general nature relating to customs matters.
2. Each Party shall designate or maintain one or more inquiry points to respond to inquiries from interested persons on customs matters, and shall make available, through the Internet, easily accessible information to formulate such consultations.
3. To the extent practicable, each Party shall publish in advance any regulations of general application governing customs matters that it proposes to adopt, and shall provide interested persons with an opportunity to comment prior to their adoption.
Article 5.3. Clearance of Goods
1. Each Party shall adopt or maintain simplified customs procedures for the efficient clearance of goods in order to facilitate trade between the Parties.
2. Pursuant to paragraph 1, each Party shall adopt or maintain procedures that:
(a) provide for the release of goods within no longer than the period required to ensure compliance with its customs legislation and, to the extent practicable, for the release of goods within 48 hours of unloading, provided that all legal requirements for release are met;
(b) allow, to the extent practicable, the goods to be cleared at the point of arrival without temporary transfer to warehouses or other premises; and
(c) permit importers, in accordance with their national legislation, to remove the goods from their customs offices in cases where the competent authority makes the final assessment of the applicable customs duties, taxes and charges, prior to and without prejudice to such assessment.
3. Each Party shall ensure, to the extent possible, that its competent authorities involved in border control, export and import of goods cooperate to facilitate trade by coordinating information and document requirements, establishing a single place and time for physical and documentary verification, among others.
Article 5.4. Automation
Each Party shall endeavor to use information technology to expedite procedures for the release of goods. In choosing the information technology to be used for this purpose, each Party shall:
(a) shall make efforts to use international standards;
(b) make electronic systems accessible to customs users;
(c) provide for the electronic transmission and processing of information and data prior to the arrival of the consignment to enable the clearance of goods upon arrival;
(d) employ electronic or automated systems for risk analysis and management;
(e) work toward the interoperability of the electronic systems of the competent authorities of the Parties to facilitate the exchange of international trade data; and
(f) work to develop a set of common data elements and processes in accordance with the World Customs Organization (WCO) Customs Data Model and related WCO recommendations and guidelines.
Article 5.5. Risk Administration or Risk Management
1. Each Party shall adopt or maintain risk management systems that enable its competent authority to focus its inspection activities on high-risk goods, and that simplify the clearance and movement of low-risk goods, while respecting the confidential nature of the information obtained through such activities.
2. In implementing risk management, each Party shall inspect imported goods based on appropriate selectivity criteria and with the aid of non-intrusive inspection tools, with the aim of reducing the physical inspection of goods entering its territory.
3. The Parties shall adopt cooperative programs to strengthen the risk management system based on best practices established between them.
Article 5.6. Expedited Delivery Shipments
Each Party shall adopt or maintain expedited customs procedures for rapid delivery shipments, while allowing for adequate control and selection of goods. Such procedures shall:
(a) provide for a simplified and expedited customs procedure for rapid delivery shipments;
(b) provide for the electronic submission or transmission and processing of the necessary information, in accordance with their national legislation, for the clearance of the goods, prior to their arrival;
(c) permit the presentation of a single manifest covering all the goods contained in a consignment transported by an express delivery service, if possible, by electronic means;
(d) provide for the clearance of certain goods with a minimum of documentation, in accordance with its national legislation;
(e) in normal circumstances, provide for the clearance of express delivery consignments within 6 hours of the presentation of the necessary customs documents, provided that the consignment has arrived and no irregularities have been detected;
(f) under normal circumstances, provide that no customs duties shall be assessed on express delivery shipments up to the amount determined under the national legislation of each Party; and
(g) notwithstanding subparagraph (f), a Party may impose customs duties or taxes and require formal entry documents for restricted goods in accordance with its domestic law.
Article 5.7. Authorized Economic Operator
1. The Parties shall implement Authorized Economic Operator programs in accordance with the WCO Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework of Standards).
2. The Parties shall work towards Mutual Recognition Agreements for their Authorized Economic Operator programs.
Article 5.8. Single Window for Foreign Trade
1. The Parties shall implement and strengthen their Foreign Trade Single Windows for the streamlining and facilitation of trade, and to the extent possible, shall seek interoperability between them, in order to exchange information that expedites trade and allows the Parties, among others, to verify the information of foreign trade operations carried out.
2. For the purposes of paragraph 1, the Parties may establish cooperation programs to strengthen their Foreign Trade Single Windows.
Article 5.9. Means of Challenge
Each Party shall ensure with respect to its administrative acts in customs matters that all persons subject to such acts in its territory have access to:
(a) a level of administrative review independent of the body or official that issued such administrative act in accordance with its national law; and
(b) judicial review of administrative acts.
Article 5.10. Sanctions
Each Party shall adopt or maintain measures that permit the imposition of civil or administrative penalties and, where appropriate, criminal penalties for failure to comply with its national laws and regulations governing the entry, exit, or transit of goods, including, inter alia, those governing tariff classification, customs valuation, rules of origin, and claims for preferential treatment under this Agreement.
Article 5.11. Advance Rulings
1. Each Party, through its competent authority, shall, prior to the importation of goods into its territory, issue an advance ruling in writing on the written request of an importer in its territory, or an exporter or producer in the territory of the other Party, based on the facts and circumstances presented by such importer, exporter, or producer of the good, provided that the requesting Party has submitted all information required by the Party.
2. Advance rulings shall be issued with respect to:
(a) tariff classification;
(b) whether a good qualifies as originating under the Rules of Origin and Customs Procedures provisions of this Agreement;
(c) the application of customs valuation criteria, in accordance with the Customs Valuation Agreement; and
(d) such other matters as the Parties may agree.
3. Each Party shall adopt or maintain procedures for the issuance of advance rulings, including:
(a) the information reasonably required to process the request;
(b) the authority of the competent authority to request additional information from the applicant during the process of evaluating the application; and
(c) the obligation of the competent authority to issue a complete, well-founded and reasoned advance ruling.
4. Each Party shall issue an advance ruling in accordance with the time limit set out in its domestic law, which may not exceed 150 days following the date on which the applicant has submitted all the information that the Party requires, including, if the Party so requests, a sample of the good for which the applicant is requesting an advance ruling. In making an advance ruling, the Party shall take into account the facts and circumstances that the requester has submitted.
5. Advance rulings shall take effect from the date of their issuance, or such later date specified in the ruling, and shall remain in effect for at least 3 years, provided that the facts or circumstances on which the ruling is based have not changed.
6. The advance ruling may be modified or revoked, ex officio or at the request of the holder of the ruling, as appropriate, in the following cases:
(a) when the advance ruling was based on false or inaccurate information;
(b) when the circumstances or facts on which it was based change; or
(c) to comply with an administrative or judicial decision, or to conform to a change in the domestic law of the Party that issued the advance ruling.
7. The Party issuing the ruling may modify or revoke it and shall notify the applicant of the measure adopted, which shall take effect from the date on which it is notified or from a later date established by the ruling.
8. The modification or revocation of an advance ruling may not be applied retroactively, unless the person to whom it was issued has submitted incorrect or false information.
9. A Party may refuse to issue an advance ruling if the facts and circumstances that form the basis for the advance ruling are subject to review in administrative or judicial proceedings. In such cases, the Party shall notify the applicant in writing, stating the factual and legal reasons on which the decision is based.
10. Subject to confidentiality requirements under its domestic law, each Party shall make its advance rulings publicly available, including on the Internet.
11. If an applicant provides false information or omits relevant facts or circumstances relating to the advance ruling, or fails to act in accordance with the terms and conditions of the ruling, the Party issuing the ruling may apply appropriate measures, including civil, criminal and administrative actions, monetary penalties or other sanctions, in accordance with its domestic law.
Section B. Cooperation and Mutual Assistance In Customs Matters
Article 5.12. Scope of Application
1. The provisions of this Section shall be applicable in the territory of the Parties only for cooperation and mutual assistance in customs matters, in accordance with the national legislation of each Party.