Title
Israel - Vietnam Free Trade Agreement
Preamble
The Government of the State of Israel (“Israel”) and the Government of the Socialist Republic of Viet Nam (“Viet Nam”), hereinafter referred collectively to as “the Parties” and individually as a “Party”, resolved to:
STRENGTHEN the special bonds of friendship and cooperation between them;
CONTRIBUTE to the harmonious development and expansion of world trade;
REDUCE obstacles to their bilateral trade;
STRENGTHEN their economic relations and promote economic cooperation, in particular for the development of trade and investments;
RECOGNISE that the promotion and protection of investments of investors of one Party in the territory of the other Party are conducive to the stimulation of mutually beneficial business activity;
CREATE an expanded and stable market for their goods and services and establish clear and mutually advantageous rules in order to foster a favourable environment for their trade and investments;
PROMOTE the harmonious development of their trade as well as the expansion and diversification of their mutual cooperation in fields of common interest;
REAFFIRM their membership in the World Trade Organization and their commitment to comply with their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization and other agreements to which both Parties are party; and
HAVE AGREED in pursuit of the above, to conclude the following Free Trade Agreement (“this Agreement”) as follows:
Body
Chapter 1. INITIAL PROVISIONS AND GENERAL DEFINITIONS
Section A. Initial Provisions
Article 1.1. Establishment of a Free Trade Area
The Parties, consistent with Article XXIV of the GATT 1994 and Article V of the GATS, hereby establish a free trade area in accordance with the provisions of this Agreement.
Article 1.2. Objectives
The objectives of this Agreement are to:
(a) liberalise and facilitate trade in goods and services between the Parties;
(b) improve investment opportunities through promotion and protection of investments and investment activities in the Parties;
(c) promote cooperation and coordination for the effective enforcement of competition laws in each Party;
(d) improve the business environment in each Party;
(e) establish a framework to enhance closer cooperation in the fields covered by this Agreement; and
(f) create effective procedures for the implementation of this Agreement, and for the resolution of disputes.
Article 1.3. Relation to other Agreements
1. The Parties affirm their rights and obligations under existing agreements to which both Parties are party, including the WTO Agreements.
2. Unless otherwise provided in this Agreement, in the event of any inconsistency between this Agreement and any agreement to which both Parties are party, the Parties shall immediately consult with each other with a view to finding a mutually satisfactory solution.
Article 1.4. Extent of Obligations
Each Party shall ensure that necessary measures are taken in order to give effect to the provisions of this Agreement, including their observance by its local governments and authorities, unless otherwise provided for in this Agreement.
Section B. General Definitions
Article 1.5. Definitions of General Application
For the purposes of this Agreement, unless otherwise specified:
Agreement on Agriculture means the Agreement on Agriculture, contained in Annex 1A to the WTO Agreement;
customs duty means any customs or import duty or any charge of any kind imposed in connection with the importation of goods, including any form of surtax or surcharge in connection with such importation, but does not include any:
(a) charge equivalent to an internal tax imposed in consistency with Article III: 2 of the GATT 1994, in respect of like, directly competitive or substitutable goods of the Party, or in respect of goods from which it has been manufactured or produced in whole or in part;
(b) duty imposed pursuant to a Party’s law in a manner that is consistent with Chapter 5 (Trade Remedies);
(c) duty imposed pursuant to any agricultural safeguard measure taken under Article 5 of the Agreement on Agriculture;
(d) fee or other charge in connection with importation commensurate with the cost of services provided; or
(e) premiums collected on an imported good arising out of any tendering or auction system in respect of the administration of quantitative import restrictions in accordance with a WTO Agreement or tariff rate quotas.
days means calendar days, including weekends and holidays;
GATS means the General Agreement on Trade in Services contained in Annex 1B of the WTO Agreement;
GATT 1994 means the General Agreement on Tariffs and Trade 1994 contained in Annex 1A of the WTO Agreement;
Harmonized System (HS) means the Harmonized Commodity Description and Coding System governed by The International Convention on the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, and Chapter Notes, and their amendments, as adopted and implemented by the Parties in their respective tariff laws;
measure means any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action| or any other form;
natural person of a Party means a national of Viet Nam or of Israel, according to their respective legislation;
person means a natural person or a juridical person;
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization done at Marrakesh on 15 April 1994; and
WTO means the World Trade Organization.
Chapter 2. TRADE IN GOODS
Article 2.1. Definitions
For the purposes of this Chapter:
Agreement on Agriculture means the WTO Agreement on Agriculture contained in Annex 1 of the WTO Agreement;
agricultural goods means those goods referred to in Article 2 of the Agreement on Agriculture;
agricultural export subsidies shall have the meaning assigned to that term in Article 1(e) of the Agreement on Agriculture, including any amendment of that Article;
consular transactions means requirements that goods of a Party intended for export to the territory of the other Party must first be submitted to the supervision of the Consul of the importing Party in the territory of the exporting Party for the purpose of obtaining consular invoices or consular visas for commercial invoices, certificates of origin, manifests, shippers’ export declarations, or any other customs documentation required on or in connection with importation;
import licensing means an administrative procedure requiring the submission of an application or other documentation (other than that generally required for customs clearance purposes) to the relevant administrative body as a prior condition for importation into the territory of the importing Party;
Article 2.2. Scope and Coverage
Except as otherwise provided, this Chapter applies to trade in goods between the Parties.
Article 2.3. National Treatmebt
1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994, including its interpretative notes, and to this end, Article III of GATT 1994 and its interpretative notes, are incorporated into and made part of this Agreement, mutatis mutandis.
2. Paragraph 1 shall not apply to the measures set out in Annex 2A (Exceptions to Articles 2.3 (National Treatment) and 2.5 (Import and Export Restrictions)).
Article 2.4. Reduction or Elimination of Customs Duties
1. Except as otherwise provided in this Agreement, neither Party may increase any existing customs duty, or adopt any new customs duty or charges having equivalent effect, on an originating good.
2. For greater certainty, a Party may:
(a) modify a tariff on a good for which no tariff preference is claimed under this Agreement;
(b) raise a customs duty to the level established in its Schedule following a unilateral reduction for the respective year; or
(c) maintain or increase a customs duty as authorised by the Dispute Settlement Body established by Annex 2 of the WTO Agreement or as authorised by an Agreement under the WTO Agreement.
3. Except as otherwise provided in this Agreement, each Party shall progressively reduce or eliminate its customs duties on originating goods in accordance with its Schedule of tariff commitments in Annex 2B (Reduction or Elimination of Customs Duties).
4. On the request of either Party, the Parties shall consult about considering accelerating the reduction and/or elimination of customs duties set out in their Schedules in Annex 2B (Reduction or Elimination of Customs Duties). An agreement between the Parties to accelerate the reduction and/or elimination of a customs duty on an originating good shall be carried out in accordance with Chapter 13 (Administration) of this Agreement.
5. A Party may at any time unilaterally accelerate the reduction and/or elimination of customs duties on originating goods of the other Party set out in its Schedule in Annex 2B (Reduction or Elimination of Customs Duties). A Party shall inform the other Party as early as practicable before the new rate of customs duty takes effect.
Article 2.5. Import and Export Restrictions
1. Except as otherwise provided in this Agreement, neither Party shall adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, except in accordance with Article XI of the GATT 1994 and its interpretative notes; and to this end, Article XI of the GATT 1994 and its Interpretative Notes are incorporated into and made a part of this Agreement, mutatis mutandis.
2. The Parties understand that the GATT 1994 rights and obligations incorporated by paragraph 1 prohibit, in any circumstances in which any other form of restriction is prohibited, a Party from adopting or maintaining:
(a) export and import price requirements, except as permitted in enforcement of countervailing and anti-dumping duty orders and undertakings; or
(b) import licensing conditioned on the fulfillment of a performance requirement.
3. Paragraph 1 and 2 shall not apply to the measures set out in Annex 2A (Exceptions to Articles 2.3 (National Treatment) and 2.5 (Import and Export Restrictions)).
4. For the purposes of this Article, performance requirement means a requirement that:
(a) a given level or percentage of goods or services be exported;
(b) domestic goods or services of the Party granting a waiver of customs duties or an import license be substituted for imported goods;
(c) a person benefiting from a waiver of customs duties or an import license purchase other goods or services in the territory of the Party granting the waiver of customs duties or the import license, or accord a preference to domestically produced goods;
(d) a person benefiting from a waiver of customs duties or an import license produce goods or supply services, in the territory of the Party granting the waiver of customs duties or the import license, with a given level or percentage of domestic content; or
(e) relates in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows;
but does not include a requirement that an imported good be:
(f) subsequently exported;
(g) used as a material in the production of another good that is subsequently exported;
(h) substituted by an identical or similar good used as a material in the production of another good that is subsequently exported; or
(i) substituted by an identical or similar good that is subsequently exported.
5. In the event that a Party introduces a measure imposing a prohibition or restriction with respect to the exportation of goods to the other Party, the Party imposing the measures, shall ensure transparency of such measures and full compliance with the obligations under this Agreement and the WTO Agreement with a view to minimizing possible distortions to trade. Upon request of a Party, the Parties shall enter into consultations regarding the measure introduced under this paragraph.
Article 2.6. Trade Related Non-Tariff Measures
1. Further to Chapter 12 (Transparency), the Parties recognise the importance of ensuring the transparency of non-tariff measures affecting trade between the Parties and recognise that any such measures should not create an unnecessary obstacle to trade between the Parties.
2. To this end, the Sub-Committee on Trade in Goods established in Article 2.12 (Sub- Committee on Trade in Goods) shall, when a Party identifies a specific non-tariff measure, review the measure and consider approaches that may better facilitate trade between the Parties and present to the Parties the results of its consideration, including any recommendation. If necessary, the results of the consideration and recommendations of the Sub-Committee on Trade in Goods shall be submitted at the next meeting of the Joint Committee for consideration or action.
Article 2.7. Import Licensing
1. Each Party shall ensure that all automatic and non-automatic import licensing measures are implemented in a transparent and predictable manner, and applied in accordance with the Agreement on Import Licensing Procedures in Annex 1A to the WTO Agreement.
2. Each Party shall notify the other Party of its existing import licensing procedures within 30 days of the entry into force of this Agreement unless they were already notified or provided under Article 5 or paragraph 3 of Article 7 of the Import Licensing Agreement. The notification shall contain the same information as referred to in Article 5 or paragraph 3 of Article 7 of the Import Licensing Agreement.
3. To the extent required by its law, before applying any new or modified import licensing procedure, a Party shall publish the new procedure or modification on an official government website at least 21 days before the new procedure or modification takes effect.
4. Upon request of the other Party, a Party shall respond within 60 days to an enquiry regarding any import licensing procedure which it intends to adopt or has adopted or maintained.
Article 2.8. Administrative Fees and Formalities
1. The Parties agree that fees, charges, formalities and requirements imposed in connection with the importation and exportation of goods shall be consistent with their obligations under GATT 1994.
2. No Party shall require consular transactions, including related fees and charges, in connection with any good imported from the other Party.
3. No Party shall levy fees and charges on or in connection with importation or exportation on an ad valorem basis.
4. Each Party shall make available through the internet a current list of the fees and charges it imposes in connection with importation or exportation.
Article 2.9. Agricultural Export Subsidies
No Party shall adopt or maintain any export subsidy or other measures with equivalent effects, as defined in the WTO Agreement on Agriculture, on trade in originating agricultural goods, in accordance with this Agreement.
Article 2.10. Administration of Trade Regulations
In accordance with Article X of GATT 1994, each Party shall administer in a uniform, impartial and reasonable manner, all its laws, regulations, judicial decisions and administrative rulings pertaining to:
(a) the classification or the valuation of goods for customs purposes;
(b) rates of duty, taxes or other charges;
(c) requirements, restrictions or prohibitions on imports or exports;
(d) the transfer of payments; and
(e) issues affecting sale, distribution, transportation, insurance, warehousing, inspection, exhibition, processing, mixing or other use of goods for customs purposes.
Article 2.11. Contact Points and Consultations
1. Each Party shall designate a contact point to facilitate communication among the Parties on any matter relating to this Chapter.
2. Where a Party considers that any proposed measure or an amendment to an existing measure of the other Party may affect trade in goods between the Parties, that Party may, through the contact point, request detailed information relating to that measure and, if necessary, request consultations with a view to resolving any concerns about the measure. The other Party shall respond within a reasonable period of time to such requests for information and consultations.
Article 2.12. Sub-Committee on Trade In Goods
1. The Parties hereby establish a Sub-Committee on Trade in Goods, comprising representatives of each Party.
2. The Sub-Committee shall meet upon the request of either Party or the Joint Committee to consider any matter arising under this Chapter and Chapter 5 (Trade Remedies).
3. The Sub-Committee shall meet at such venues and times as may be agreed by the Parties. Meetings may be held by any means as mutually determined by the Parties.
4. The Sub-Committee’s functions shall include:
(a) reviewing and monitoring the implementation and operation of the Chapters referred to in paragraph 2;
(b) identifying and recommending measures to resolve any difference that may arise, and to promote and facilitate improved market access, including any acceleration of tariff commitments under Article 2.4 (Reduction or Elimination of Customs Duties);
(c) recommending to the Joint Committee to establish any working groups, as it deems necessary; and
(d) undertaking any additional work that the Joint Committee may assign.
Chapter 3. RULES OF ORIGIN
Article 3.1. Definitions
For the purposes of this Chapter:
aquaculture means 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 regular stocking, feeding, or protection from predators, etc.;
Chapters, Headings and Subheadings means the chapters, the headings and the subheadings (two, four and six-digit codes respectively) used in the nomenclature which makes up the Harmonized System or HS;
CIF means the value of the goods imported, including freight and insurance costs to the port of importation in Israel or in Viet Nam;
classification refers to the classification of a product or material under a particular heading or sub-heading;
Competent Authorities refers to:
For Israel, the Customs Directorate of the Israel Tax Authority of the Ministry of Finance, or its successor;
For Viet Nam, the Ministry of Industry and Trade or the General Department of Viet Nam Customs under the Ministry of Finance, or its successor;
consignment means goods 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 value means the value as determined in accordance with Article VII of GATT 1994 and the Agreement on Implementation of Article VII of GATT 1994 (WTO Agreement on Customs Valuation);
ex-works price means the price paid for the product ex-works to the manufacturer in Israel or in Viet Nam in whose undertaking the last working or processing is carried out, provided the price includes the value of all the materials used and all other costs related to its production, excluding any internal taxes which are or may be repaid when the product obtained is exported;
goods mean both materials and products;
FOB means the free-on-board value of the goods;
fungible materials means materials that are of the same kind and commercial quality, with the same technical and physical characteristics, and which cannot be distinguished from another, once they are incorporated into the finished good.
Issuing Authority refers to:
For Israel, The Customs Directorate of the Israel Tax Authority of the Ministry of Finance;
For Viet Nam, the Ministry of Industry and Trade or an Authority designated to issue a certificate of origin as notified to the other Party in accordance with this Chapter;
material means any ingredient, raw material, component or part, etc., used in the production of a good or physically incorporated into a good or subjected to a process in the production of another good;
production means any kind of working or processing, including assembly or specific operations such as growing, mining, harvesting, farming, raising, breeding, extracting, gathering, collecting, capturing, fishing, trapping, hunting or manufacturing;
product means the product manufactured, even if it is intended for later use in another manufacturing operation;
Value of Non-Originating Materials is the CIF value at the time of importation or the earliest ascertained price paid for all non-originating materials that are acquired by the producer in the production of the good.
Article 3.2. Originating Good
For the purposes of implementing this Agreement, the following goods shall be considered as originating in a Party: