2. The Parties, through their competent authorities, shall provide each other with mutual cooperation and assistance in customs matters in order to ensure the proper application of their customs legislation, the facilitation of customs procedures, and the prevention, investigation and punishment of customs offenses.
3. The information provided shall be used solely for the purposes set forth in this Section, including in cases where it is required in the framework of administrative, judicial or investigative proceedings. The information may also be used for other purposes or by other authorities, only in the event that the requested authority expressly authorizes it in writing.
4. Assistance in the collection of duties, taxes or fines is not covered by this Section.
5. The Parties shall cooperate to strengthen the capacity of each competent authority to enforce its regulations and procedures governing imports. In addition, the competent authorities shall establish and maintain other channels of communication to facilitate the secure and expeditious exchange of information and improve coordination with respect to the information and improve coordination with respect to matters relating to this Section.
Article 5.13. Customs Cooperation
1. Customs cooperation includes the exchange of information, legislation, and best practices in customs matters, as well as the exchange of experiences, training, and any kind of technical or material support appropriate for strengthening the customs management of the Parties.
2. The competent authorities of the Parties recognize that customs cooperation between them is essential to facilitate trade. To this end, they shall cooperate to achieve compliance with their respective customs laws and regulations, as well as those relating to compliance with this Chapter.
3. The Parties, in accordance with their national legislation and available resources, shall promote and facilitate cooperation between their respective competent authorities, in order to ensure the application of their customs legislation and in particular to:
(a) organize joint training programs on topics relating to trade facilitation and customs matters pertaining to this Chapter;
(b) contribute to the collection and exchange of statistics relating to the import and export of goods, the harmonization of documentation used in trade, and the standardization of data;
(c) prevent customs violations; and
(d) promote mutual understanding of each Party's customs legislation, procedures and best practices.
4. The competent authorities of the Parties shall cooperate in:
(a) training, inter alia, for the development of specialized skills of their customs officials;
(b) the exchange of technical information related to customs legislation, procedures and new technologies applied by the Parties;
(c) the harmonization of methods and the exchange of information and personnel between customs laboratories;
(d) collaboration in the areas of research, development and testing of new customs procedures;
(e) the development of effective mechanisms for communication with foreign trade operators and academia;
(f) any differences related to the tariff classification of goods; and
(g) the development of initiatives in mutually agreed areas.
Article 5.14. Mutual Assistance
1. Mutual assistance includes the exchange of information and other provisions set out in this Section for the prevention, investigation, and punishment of customs infractions.
2. When the competent authority of one of the Parties has reasonable indications of a customs infraction, it may request the competent authority of the other Party to provide it with information on the matter.
3. For purposes of paragraph 2, "prima facie evidence of a customs violation" means evidence based on relevant factual information obtained from public or private sources, including one or more of the following:
(a) historical evidence of non-compliance with customs legislation or regulations by an importer or exporter, manufacturer or producer, or other person involved in the movement of goods from the territory of a Party into the territory of the other Party, or
(b) other information that the requesting authority and the requested authority agree is sufficient in the context of a particular request.
4. The mutual assistance set forth in this Section shall not cover requests for the arrest or detention of persons, judicial notices, seizure or detention of property, or the collection of duties, taxes, surcharges, fines, or any other sums for the account of a Party.
Article 5.15. Form and Content of Mutual Assistance Requests
1. Requests for mutual assistance under this Section shall be addressed directly from the requesting authority to the requested authority, in writing or by electronic means, attaching the necessary documents. The requesting authority shall execute electronic requests in writing. As long as the written formality has not been received, the requested authority may suspend the processing of the request.
2. The Parties shall exchange the name and address of the administrative office competent to coordinate mutual assistance requests and responses.
3. In cases of urgency, requests may also be made orally, and must be confirmed in writing within a period not exceeding 3 working days from the day following the date of receipt of the oral request. Otherwise, the execution of such requests may be suspended.
4. Requests made pursuant to this Article shall include, at a minimum, the following:
(a) from the requesting authority, the name, signature and position of the official making the request;
(b) from the requested authority, the name and title of the official to whom the request is addressed;
(c) the purpose of and the reason for the request;
(d) a brief description of the facts that are the subject of the investigation, as well as the investigations already carried out, if applicable;
(e) the grounds and reasons for the customs procedure in question;
(f) the names, addresses, identification documents or any other information known and relevant of the persons related to the facts in the subject matter of the application; and
(g) all necessary information available to identify the goods, means of transport or the customs declaration related to the application.
5. The requested authority shall provide, within the framework of its powers and legislation, information relating to:
(a) persons known to the applicant authority to have committed or to be involved in the commission of a customs offence;
(b) goods destined for the territory of the requesting authority, which are sent or intended to be sent to a warehouse for subsequent shipment to that territory;
(c) means of transport presumably used in the commission of customs offenses in the territory of the requesting authority;
(d) activities which are or appear to be customs infringements and which may be of interest to the requesting authority;
(e) the goods which are or may be transported and in respect of which there are reasonable indications to suppose that the same will be destined or used in the commission of customs infringements;
(f) whether the goods exported from the territory of the requesting authority have been properly imported into the territory of the requested authority, specifying, where applicable, the customs procedure applied to such goods;
(g) whether the goods imported into the territory of the requesting authority have been properly exported from the territory of the requested authority, specifying, where appropriate, the customs procedure applied to such goods;
(h) whether in the import, export or transit operations the observance of prohibitions and restrictions on imports, exports and transit of goods or their release from customs duties, taxes and other charges has been complied with;
(i) the determination of the customs duties of the imported goods and, in particular, information on the determination of the customs value contained in the customs declaration; and
(j) such other information as the Parties may agree.
6. If a request does not meet the formal requirements set out above, the requested authority may reject it or request that it be corrected or supplemented.
Article 5.16. Execution of Requests
1. The requested authority shall respond to the requesting authority's request within a maximum period of 60 days from the date of receipt of the written request, or from the date of completion or correction of the request when the request did not initially meet the formal requirements set forth in this Section. In the event that the requested authority needs more time than that established to respond to the request, it shall communicate this situation to the requesting authority, informing it of the period of time required to respond to the request.
In the event that the requested authority needs more time to respond to the request, it shall communicate this situation to the requesting authority informing the term within which it may resolve the request, which may not exceed 30 additional days.
2. A Party may not make more than 15 requests for assistance per month to the other Party. This shall be considered the monthly response parameter to which either Party is obliged in accordance with the provisions of this Article.
3. In responding to a request, the requested authority shall, within the limits of its competence, provide the information in its possession, and shall carry out or arrange for the necessary investigations to be carried out.
4. At the request of the applicant authority, the requested authority shall conduct an investigation in accordance with its national legislation to obtain information relating to a possible customs infringement occurring within its territory, and shall provide the applicant authority with the results of such investigation and any related information it considers relevant.
5. Without prejudice to Article 5.17, the requested authority shall provide information in accordance with its national legislation.
Article 5.17. Exceptions to the Obligation to Provide Mutual Assistance
1. Mutual assistance may be refused or may be subject to compliance with certain conditions or requirements in cases where a Party considers that assistance under this Section would:
(a) be prejudicial to the sovereignty of the Party requested to provide assistance under this Section;
(b) be detrimental to public order, national security, and public health;
(c) violate a tax, industrial, commercial or professional secret duly protected by its domestic law; or
(d) be contrary to its national law.
2. The requested authority may postpone assistance where it considers that it may interfere with an ongoing investigation, criminal prosecution or administrative proceeding. In such a case, the requested authority shall consult with the requesting authority to determine whether assistance may be given in accordance with such terms and conditions as the requested authority may specify.
3. The requesting authority shall be in a position to provide the same assistance if so requested. Where the applicant authority seeks assistance which it would itself be unable to provide if so requested, it shall draw attention to that fact in its request. The requested authority may then either refuse to grant the assistance or decide how it may respond to such a request.
4. If any of the exceptions provided for in this Article are found to exist, the requested authority shall inform the requesting authority that it is not possible to comply with the request for assistance within 20 days of receipt of the request, stating expressly the reasons why the request cannot be complied with. Pursuant to the foregoing, upon receipt of the response issued by the requested authority, the request for assistance shall be deemed to have been exhausted.
Article 5.18. Files, Documents and other Materials
1. Documents provided under this Section shall not require for their evidentiary validity additional certification, authentication, or any other solemnity than that provided by the competent authority and shall be deemed authentic and valid.
2. At the request of the requesting authority, the requested authority may certify or authenticate the copies of the documents requested.
3. Any information to be provided pursuant to this Section may be accompanied by additional information that is relevant to its interpretation or use.
Article 5.19. Use of Information and Confidentiality
1. Where a Party provides information to the other Party in accordance with the provisions of this Chapter, and clearly and specifically designates it as confidential, the other Party shall maintain the confidentiality of such information in accordance with its domestic law.
2. A Party may refuse to provide information requested by another Party where that Party has not acted in accordance with the provisions of this Article.
3. Each Party shall, in accordance with its domestic law, adopt or maintain procedures whereby confidential information submitted by another 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 5.20. Costs
1. The competent authorities shall not seek reimbursement for costs and/or expenses incurred in the execution of the requests provided for in this Section.
2. If it is necessary to incur costs and/or expenses of an exceptional nature to execute a request under this Section, the competent authorities shall consult to determine the terms and conditions under which such request shall be executed, as well as the manner in which such costs and/or expenses shall be covered.
Article 5.21. Compliance Verification Process
1. For the purposes of this Section, lack of mutual assistance between the competent authorities of the Parties shall be understood to mean the repeated refusal or unjustified delay in executing a request and/or communicating its result.
2. For the cases described in paragraph 1, the procedure described below shall be followed:
(a) the competent authorities shall communicate this circumstance to each other in writing or electronically, in order to be able to provide a mutually acceptable solution to the dispute;
(b) upon completion of subparagraph (a), the matter shall be referred to the Committee on Rules of Origin, Customs Procedures, Trade Facilitation and Customs Cooperation, which shall have 30 days to meet; and
(c) if the Committee on Rules of Origin, Customs Procedures, Trade Facilitation and Customs Cooperation fails to resolve the matter raised, the matter shall be referred to the Commission.
3. For the purposes of recourse to Chapter 18 (Dispute Settlement), the Parties shall exhaust the procedures provided for in this Article.
Chapter 6. TRADE DEFENSE
Section A. Bilateral Safeguard Measures
Article 6.1. Definitions
For the purposes of this Section, the following definitions shall apply:
threat of serious injury: the clear imminence of serious injury based on facts and not merely on allegation, conjecture, or remote possibility;
competent investigating authority:
(a) in the case of Mexico, the International Trade Practices Unit of the Ministry of Economy; and
(b) in the case of Panama, the Dirección General de Defensa Comercial del Ministerio de Comercio e Industrias;
or its successors;
serious injury: a significant general impairment of the situation of a domestic industry;
directly competitive merchandise: that which, not being similar to the merchandise that is the object of the application, is essentially equivalent for commercial purposes, because it is dedicated to the same use and is interchangeable with it;
similar merchandise: that which is identical to the merchandise that is the subject of the application that, not being similar, has similar characteristics and composition, which allows it to fulfill the same functions and be commercially interchangeable with it;
transition period: the period of tariff reduction that corresponds to each good in accordance with the Tariff Elimination Program plus an additional period of 2 years; and
domestic industry: the aggregate of all domestic producers of like or directly competitive goods, or those whose collective production constitutes a major proportion of the total domestic production of such goods.
Article 6.2. Bilateral Safeguard Measures
1. A Party may apply a bilateral safeguard measure only during the transition period if, as a result of the implementation of the Tariff Elimination Program, the importation into the territory of a Party of goods originating in the other Party has increased in absolute and relative terms, in relation to the consumption or production of the importing country, and under such conditions as to cause serious injury or threat of serious injury to the domestic industry of like or directly competitive goods.
2. The importing Party may adopt bilateral safeguard measures, which shall be applied in accordance with the following rules:
(a) where necessary to prevent or remedy serious injury or threat thereof caused by imports of goods originating in the other Party and to facilitate adjustment; and
(b) the measure shall be exclusively of a tariff nature.
3. If the conditions set out in paragraphs 1 and 2 are met, a Party may only apply the lesser of the following options:
(a) suspend the future reduction of any customs duty provided for in this Agreement on the good; or
(b) increase the customs duty for the good to a level that does not exceed the lesser of:
(i) the MFN customs duty applicable to it at the time the measure is applied; or
(ii) the MFN customs duty applied on the day immediately preceding the date of entry into force of this Agreement.
4. No Party may maintain a bilateral safeguard measure:
(a) except to the extent and for the period necessary to prevent or remedy serious injury and to facilitate adjustment,
(b) for a period exceeding 2 years, unless the competent investigating authority determines to extend it for an additional 1 year, and it is demonstrated, in accordance with the procedures set forth in its domestic law, that the measure continues to be necessary to prevent or remedy serious injury and to facilitate adjustment, provided that there is evidence that the domestic industry is adjusting. The total period of application of the bilateral safeguard measure shall not exceed 3 years including the provisional measure and the referred extension.
5. Upon termination of the application of a bilateral safeguard measure, the Party shall establish the customs duty that would have been in effect if the measure had not been applied, in accordance with the Tariff Elimination Program.
6. No Party may apply a bilateral safeguard measure before 1 year has elapsed from the date of entry into force of this Agreement.
7. The Parties may apply a bilateral safeguard measure only once to the same good.
8. No Party may maintain a bilateral safeguard measure after the expiration of the transition period.
9. In order to facilitate readjustment in a situation where the expected duration of a bilateral safeguard measure exceeds 1 year, the Party applying the measure shall progressively liberalize it at regular intervals during the period of application. If a bilateral safeguard measure is extended, it may not be more restrictive than it was at the end of the initial period of application of the measure and shall continue to be progressively liberalized.
Article 6.3. Investigation Procedures
1. In order to determine whether a bilateral safeguard measure should be applied, the competent investigating authority of the importing Party shall conduct an investigation, which may be ex officio or at the request of a party. The petitioners shall represent at least 25% of the total domestic production of the identical, similar or directly competitive merchandise produced by the domestic industry.
2. In the investigation described in paragraph 1, the Party shall comply with the following:
(a) determine that the growth of imports has caused or threatens to cause serious injury to a domestic industry. The competent investigating authorities shall evaluate all relevant factors of an objective and quantifiable nature having a bearing on the situation of the domestic industry, in particular, the rate of growth of imports in absolute and relative terms, the share of the domestic market taken by increased imports, changes in the level of sales, production, productivity, utilization of installed capacity, profits and losses and employment, and
(b) the determination referred to in subparagraph (a) shall not be made unless the investigation demonstrates, on the basis of objective evidence, the existence of a causal link between increased imports of the good and serious injury or threat thereof to the domestic industry. Where factors other than increased imports are at the same time causing injury to the domestic industry, such injury shall not be attributed to increased imports.
3. Interested parties providing confidential information shall be required to furnish non-confidential written summaries thereof, which shall enable the person consulting them to have a reasonable understanding of their contents. If the interested parties indicate the impossibility of summarizing this information, they shall explain the reasons why it is impossible to do so. For the purposes of this paragraph and provided that it is consistent with it, all information that by its nature is confidential shall be treated in accordance with the provisions of Article 3.2 of the Agreement on Safeguards and the provisions of the domestic legislation of the Parties.
4. The requests referred to in paragraph 1, and in any case, the determinations of initiation and the reports containing the technical reasoning on which the determination is based, shall contain sufficient background information to support and motivate the initiation of the investigation, including:
(a) the name and available address of the domestic producers of identical, like or directly competitive goods, which are representative of the domestic production, as established in paragraph 1; their share in the total domestic production of those goods and the reasons why they are considered representative of that sector;
(b) a clear and complete description of the goods subject to the investigation, their tariff classification and current tariff treatment, and the identification of the identical, like, or directly competitive goods and the reasons why they are considered as such;
(c) import data for the 3 years available closest to the filing of the application and including the period of investigation;
(d) the data in value and volume, on the total national production of the identical, similar or direct competitors merchandise, corresponding to the 3 years available closest to the filing of the application and including the period of investigation, as well as the percentage that the applicants represent in relation to the total national production, and the reasons that lead them to affirm that they are representative of the national production industry;
(e) the data demonstrating that there is reasonable evidence of serious injury or threat of serious injury caused by the imports to the domestic production in question, and the basis for alleging that the increase in imports of these goods in relative and absolute terms in relation to the domestic production, is the cause of the injury or threat of injury mentioned. Among the aspects to be analyzed are all relevant factors of an objective and quantifiable nature having a bearing on the situation of the domestic industry, in particular, the rate of growth of imports in absolute and relative terms, the share of the domestic market absorbed by the increased imports, changes in the level of sales, production, productivity, utilization of installed capacity, profits and losses, and employment, and (f) a description of the actions taken by the domestic industry to prevent the injury or threat of injury.
(f) a description of the actions that the domestic industry intends to take in order to adjust its competitive conditions.
5. Each Party shall establish or maintain equitable, timely, transparent and effective procedures for the application of bilateral safeguard measures, respecting at all times the principle of due process. This shall include, at the request of the other Party or its exporters, the holding of a public hearing at which interested parties, including the Party whose goods are being investigated, shall be allowed to present their arguments.
6. Each Party shall ensure that its competent investigating authorities complete any bilateral safeguard investigation within the time limit set out in its domestic law, not to exceed 12 months from the date of initiation. This period may be extended for a maximum period of up to 2 additional months, by reasoned resolution of the competent investigating authority.
Article 6.4. Provisional Bilateral Safeguard Measures
1. A Party may adopt a provisional bilateral safeguard measure in critical circumstances where any delay would cause damage difficult to repair to the domestic industry from like or directly competitive goods, based on a preliminary determination that there is clear evidence that increased imports have caused or are threatening to cause serious injury to the domestic industry.
2. The duration of the provisional bilateral safeguard measure shall not exceed 200 days and shall take the form of tariff increases, which shall be promptly refunded if the investigation does not determine that increased imports have caused or threatened to cause serious injury to a domestic industry. This period shall be computed as part of the duration of the definitive measure and its extension.
Article 6.5. Notification and Consultation
1. A Party shall promptly notify promptly in writing the other Party that may be affected, when:
(a) initiates a bilateral safeguard proceeding pursuant to this Section;
(b) adopts a provisional bilateral safeguard measure; and
(c) adopts a definitive bilateral safeguard measure or decides to extend it.
2. In addition to the notification referred to in paragraph 1, the Party taking any of the actions referred to in that paragraph shall publish its determination in the appropriate official publication.
3. In the notification referred to in paragraph 1, the Party conducting a bilateral safeguard proceeding shall provide the Party whose good is subject to such proceeding and its exporters with a copy of the public version of its determination and of the initial, interim or final technical report containing the technical reasoning underlying the determination.
4. The notification of initiation to the interested parties shall contain a copy of the public versions of the application and its annexes or, as the case may be, of the respective documents in the case of investigations initiated ex officio, as well as a questionnaire detailing the points on which the interested parties must provide information.
5. The Party conducting a bilateral safeguard proceeding pursuant to this Section shall, within 30 days following the expiration of the deadline for the submission of the response to the questionnaires, invite the other Party to hold consultations to discuss the possible adoption of a bilateral safeguard measure, which shall have a maximum duration of 30 days from the day following receipt by the exporting Party of such invitation.
6. Bilateral safeguard measures may only be imposed after the conclusion of the consultation period referred to in paragraph 5.
The holding of consultations shall not prevent the authority from concluding the investigation within the period referred to in Article 6.3.
Article 6.6. Compensation for Bilateral Safeguard Measures
1. A Party that intends to apply or intends to extend a bilateral safeguard measure shall, after consultation with that Party, provide to the other Party mutually agreed trade compensation consisting of temporary additional tariff concessions, the effects of which on the trade of the exporting Party are equivalent to the impact of the safeguard measure.
2. If the Parties fail to reach agreement on the compensation within 30 days, the Party proposing to take the bilateral safeguard measure shall have the authority to do so and the exporting Party may suspend tariff concessions having trade effects equivalent to those of the measure taken.
3. A Party that decides to suspend tariff concessions pursuant to paragraph 2 shall notify the Party applying the bilateral safeguard measure in writing of such suspension at least 30 days prior to suspending concessions.