(b) the same class of motor vehicles produced in the same plant in the territory of a Party;
(c) the same model line of motor vehicles produced in the territory of a Party; or (d) the same class of motor vehicles produced in the territory of a Party.
Article 4-16. Non-Qualifying Operations and Practices
A good shall not be considered to be an originating good merely by reason of:
(a) dilution with water or another substance that does not materially alter the characteristics of the good;
(b) simple operations for conserving the good during transport or storage, such as airing, refrigeration, removal of damaged parts, drying or the addition of substances;
(c) dusting, screening, classification, selection, washing, cutting;
(d) packing, repacking or packaging for retail sale;
(e) the collection of goods to make series, sets or assortments;
(f) application of marks, labels or similar distinguishing signs;
(g) cleaning, including the removal of rust, grease, paint or other coverings; and
(h) the simple collection of parts and components classified as a good under Rule 2(a) of the General Rules of Interpretation of the Harmonized System. This shall not apply to goods that were already assembled and subsequently disassembled for convenient packing, handling or shipping.
2. Any activity or pricing practice in respect of which it may be demonstrated, on the basis of a preponderance of evidence, that the object was to circumvent this Chapter shall not confer origin.
3. The provisions of this Article shall take precedence over the specific rules established in Annex 4-03.
Article 4-17. Transhipment and Direct Shipment
A good shall not be considered to be an originating good by reason of having undergone production that satisfies the requirements of Article 4-03 if, subsequent to that production:
(a) the good undergoes further production or any other operation outside the territories of the Parties, other than unloading, reloading or any other operation necessary to preserve it in good condition or to transport the good to the territory of the other Party;
(b) the good does not remain under the control or supervision of the customs authority in the territory of a non-party country.
Article 4-18. Sub-Committee on Rules of Origin
1. Notwithstanding Article 3-16(5} (Committee of Trade in Goods), the Sub- Committee on Rules of Origin shall have the following functions:
(a) cooperate in applying this Chapter in accordance with Chapter 5 (Customs Procedures);
(b) on the request of a Party, consider duly-substantiated proposals to modify the rules of origin to reflect changes in production processes or other aspects related to the determination of origin of a good;
(c) propose to the Committee on Trade in Goods modifications and additions to this Chapter, the Uniform Regulations and to matters in its sphere of competence;
(d) conduct technical studies to fulfil the objective established in Article 20-09 (Cooperation on Rules of Origin); and
(e) determine, where appropriate, the influence of interest costs incurred by a producer of one Party on the production of a good, in order to avoid undue use of such costs in determining the origin of that good.
2. Paragraph 1 shall not be construed to prevent a Party from issuing a determination of origin or an advance ruling or from taking such other action as it considers necessary.
Chapter 5. CUSTOMS PROCEDURES
Article 5-01. Definitions
1. For the purposes of this Chapter:
commercial importation means the importation of a good into the territory of a Party for the purpose of sale, or any commercial, industrial or other like use;
customs administration means the competent authority that is responsible under the law of a Party for the administration of customs laws and regulations;
determination of origin means a determination as to whether a good qualifies as an originating good in accordance with Chapter 4 (Rules of Origin);
exporter means an exporter located in the territory of a Party from which the good is exported, required under this Chapter to maintain the records in the territory of that Party referred to in Article 5-06(a);
identical goods means "identical goods" as defined in the Customs Valuation Code;
importer means an importer located in the territory of a Party to which the good is imported, required under this Chapter to maintain the records in the territory of that Party referred to in Article 5-06(b);
preferential tariff treatment means the duty rate applicable to an originating good in accordance with the Tariff Reduction Programme;
producer means a "producer" as defined in Article 4-01 (Definitions), located in the territory of a Party, required maintain the records in the territory of that Party referred to in Article 5-06(a); and
value means the value of a good or material for the purposes of calculating customs tariffs or the application of Chapter 4 (Rules of Origin).
2. Unless otherwise specified in this Article, this Chapter includes the definitions established in Chapter 4 (Rules of Origin).
Article 5-02. Declaration and Certification of Origin
1. For the purposes of this Chapter, on the date on which this Agreement comes into force, the Parties shall prepare a single form for the Certificate of Origin and a single form for the declaration of origin, which may be modified by mutual agreement.
2. The Certificate of Origin referred to in paragraph 1 shall serve to certify that a good exported from the territory of one Party to the territory of the other Party qualifies as an originating good. The certificate shall remain valid for up to two years after it is signed.
3. Each Party shall require its exporters to complete and sign a Certificate of Origin for any exportation of a good for which an importer may claim preferential tariff treatment.
4. Each Party shall require that:
(a) where an exporter is not the producer of the good, the exporter may complete and sign a Certificate of Origin on the basis of:
(i) its knowledge of whether the good qualifies as an originating good,
(ii) its reasonable reliance on the producer's written representation that the good qualifies as an originating good, or
(ii) the declaration of origin referred to in paragraph 1;
(b) the declaration of origin applicable to the good to be exported shall be completed and signed by the producer of the good and given voluntarily to the exporter. The statement shall remain valid for up to two years after it is signed.
5. Each Party shall provide that a Certificate of Origin that has been completed and signed by an exporter in the territory of the other Party is applicable to:
(a) a single importation of one or more goods; or
(b) multiple importations of identical goods within a specified period, not exceeding 12 months, set out in the certificate by the exporter.
Article 5-03. Obligations Regarding Importations
1. Each Party shall require an importer in its territory that claims preferential tariff treatment for a good imported into its territory from the territory of the other Party to:
(a) make awritten statement, based on a valid Certificate of Origin, that the good qualifies as an originating good;
(b) have the certificate in its possession at the time the statement is made;
(c) provide, on the request of that Party's customs administration, a copy of the certificate; and
(d) promptly make a corrected statement and pay any duties owing where the importer has reason to believe that a certificate on which a statement was based contains information that is not correct. If the importer complies with the above obligation, it shall not be subject to penalties.
2. Each Party shall provide that when an importer in its territory fails to comply with any of the requirements established in this Chapter it shall be denied the preferential tariff treatment claimed for the good imported into the territory of the other Party.
3. Each Party shall provide that, where a good would have qualified as an originating good when it was imported into the territory of that Party but no claim for preferential tariff treatment was made at that time, the importer of the good may, no later than one year after the date on which the good was imported, apply for a refund of any excess duties paid as the result of the good not having been accorded preferential tariff treatment, on presentation of:
(a) a written statement that the good qualified as an originating good at the time of importation;
(b) a copy of the Certificate of Origin; and
(c) such other documentation relating to the importation of the good as that Party may require.
Article 5-04. Obligations Regarding Exportations
1 Each Party shall provide that an exporter or a producer in its territory that has completed and signed a certificate or declaration of origin, shall provide a copy of the certificate or declaration to its customs administration on request.
2. Each Party shall provide that an exporter or a producer in its territory that has completed and signed a certificate or declaration of origin, and that has reason to believe that the certificate contains information that is not correct, shall promptly notify in writing all persons to whom the certificate or declaration was given of any change that could affect the accuracy or validity of the certificate or declaration and its customs administration. In such cases, the exporter or producer shall not be subject to penalties for having presented an incorrect certificate or declaration.
3. Each Party shall provide that a false certification or statement by an exporter or a producer in its territory that a good to be exported to the territory of the other Party qualifies as an originating good shall have the same legal consequences, with appropriate modifications, as would apply to an importer in its territory for a contravention of its customs laws and regulations regarding the making of a false statement or representation. Each party may apply such measures as the circumstances may warrant where an exporter or a producer in its territory fails to comply with any requirement of this Chapter.
4. The customs administration of the exporting Party shall inform the customs administration of the importing Party in writing of the notification referred to in paragraph 2.
Article 5-05. Exceptions
Provided that an importation does not form part of two or more importations that may reasonably be considered to have been undertaken or arranged for the purpose of avoiding the certification requirements of Articles 5-02 and 5-03, the Parties shall not require a Certificate of Origin in the following cases:
(a) a commercial importation of a good whose value does not exceed US$1,000 or its equivalent amount in the Party's currency, or such higher amount as it may establish, except that it may require that the invoice accompanying the importation include astatement by the importer or exporter certifying that the good qualifies as an originating good;
(b) a non-commercial importation of a good whose value does not exceed US$1,000 or its equivalent amount in the Party's currency, or such higher amount as it may establish; or
(c) an importation of a good for which the Party into whose territory the good is imported has waived the requirement for a Certificate of Origin.
Article 5-06. Accounting Records
Each Party shall provide that:
(a) an exporter or a producer in its territory that completes and signs a certificate or declaration of origin shall maintain, for a minimum of five years after the date on which the certificate or declaration was signed, all records and documents relating to the origin of a good, including records and documents associated with:
(i) the purchase of, cost of, value of, and payment for, the good that is exported from its territory,
(ii) the purchase of, cost of, value of, and payment for, all materials, including indirect materials, used in the production of the good that is exported from its territory, and
(ii) the production of the good in the form in which the good is exported from its territory; and
(b) an importer claiming preferential tariff treatment for a good imported into the Party's territory from the territory of the other Party shall maintain, for a minimum of five years after the date of importation of the good, the Certificate of Origin and all documentation relating to the importation of the good, as the importing Party may require.
Article 5-07. Origin Verifications
1. The importing Party may request information from the exporting Party on the origin of a good.
2. For purposes of determining whether a good imported into its territory from the territory of the other Party under preferential tariff treatment qualifies as an originating good, a Party may, through its customs administration, conduct a verification solely by means of:
(a) written questionnaires to exporters or producers in the territory of the other Party;
(b) visits to the premises of an exporter or a producer in the territory of the other Party to review the records and documents accrediting compliance with the rules of origin in accordance with Article 5-06 (a) and observe the facilities used in the production of the materials; or
(c) such other procedure as the Parties may agree.
3. Prior to conducting a verification visit pursuant to paragraph (2)(b), the importing Party shall, through its customs administration, deliver a written notification of its intention to conduct the visit. The notification shall be sent to the exporter or producer whose premises are to be visited, to the customs administration of the Party in whose territory the visit is to be conducted and, if requested by the latter, to the embassy of the other Party in the territory of the importing Party. The customs administration of the importing Party shall obtain the written consent of the exporter or producer whose premises are to be visited.
4. The notification referred to in paragraph 3 shall include:
(a) the identity of the customs administration issuing the notification;
(b) the name of the exporter or producer whose premises are to be visited;
(c) the date and place of the proposed verification visit;
(d) the object and scope of the proposed verification visit, including specific reference to the good that is the subject of the verification;
(e) the names, identification and titles of the officials performing the verification visit; and
(f) the legal authority for the verification visit.
5. Where an exporter or a producer has not given its written consent to a proposed verification visit within 30 days of receipt of notification pursuant to paragraph 3, the notifying Party may deny preferential tariff treatment to the good that would have been the subject of the visit.
6. Each Party shall provide that, where its customs administration receives notification pursuant to paragraph 3, the customs administration may, within 15 days of receipt of the notification, postpone the proposed verification visit for a period not exceeding 60 days from the date of such receipt, or for such longer period as the Parties may agree.
7. A Party shall not deny preferential tariff treatment to a good based solely on the postponement of a verification visit pursuant to paragraph 6.
8. Each Party shall permit an exporter or a producer whose good is the subject of a verification visit to designate two observers to be present during the visit, provided that the observers do not participate in a manner other than as observers. The failure of the exporter or producer to designate observers shall not result in the postponement of the visit.
9. Each Party shall, through its customs administration, where conducting a verification of origin involving a regional value content, de minimis calculation or any other provision in Chapter 4 (Rules of Origin} to which Generally Accepted Accounting Principles may be relevant, apply such principles as are applicable in the territory of the Party from which the good was exported.
10. After the verification visit, the customs administration shall provide the exporter or producer whose good is the subject of the verification with a written determination of whether the good qualifies as an originating good, including findings of fact and the legal basis for the determination.
11. Where a verification by a Party establishes that an exporter or a producer has made a false or unsupported certification or declaration on more than one occasion that a good imported into its territory qualifies as an originating good, the importing Party may withhold preferential tariff treatment to identical goods exported or produced by such person until that person establishes compliance with Chapter 4 (Rules of Origin).
12. Each Party shall provide that where its customs administration determines that a good imported into its territory does not qualify as an originating good based on a tariff classification or a value applied by the Party to one or more materials used in the production of the good, which differs from the tariff classification or value applied to the materials by the Party from whose territory the good was exported, the importing Party's determination shall not become effective until it notifies in writing both the importer of the good and the person that completed and signed the Certificate of Origin for the good of its determination.
13. A Party shall not apply a determination made under paragraph 12 to an importation made before the effective date of the determination where:
(a) the customs administration of the exporting Party has issued an advance ruling under Article 5-09 or any other ruling on the tariff classification or on the value of such materials, on which a person is entitled to rely; and
(b) such rulings were given prior to notification of the verification of origin.
Article 5-08. Confidentiality
1. Each Party shall maintain, in accordance with its law, the confidentiality of confidential information collected pursuant to this Chapter and shall protect that information from disclosure that could prejudice the person providing the information.
2. The confidential information collected pursuant to this Chapter may only be disclosed to those authorities responsible for the administration and enforcement of determinations of origin and of customs and revenue matters, as appropriate.
Article 5-09. Advance Rulings
1. Each Party shall, through its customs administration, provide for the expeditious issuance of written advance rulings, prior to the importation of a good into its territory. The advance rulings shall be issued by the customs administration of the territory of the importing Party to an importer in its territory or an exporter or a producer in the territory of the other Party, on the basis of the facts and circumstances presented by them, concerning:
(a) whether a good qualifies as an originating good under Chapter 4 (Rules of Origin);
(b) whether non-originating materials used in the production of a good undergo a change in tariff classification set out in Annex 4-03 (Specific Rules of Origin);
(c) whether a good satisfies a regional value-content established in Chapter 4 (Rules of Origin);
(d) whether the method applied by an exporter or a producer in the territory of the other Party, in accordance with the principles of the Customs Valuation Code, for calculating the transaction value of the good or of the materials used in the production of the good for which an advance ruling is requested is suitable for determining whether the good complies with the regional value content under Chapter 4 (Rules of Origin);
(e) whether the method applied by an exporter or a producer in the territory of the other Party for reasonably allocating costs, in accordance with the methods set out in the Uniform Regulations for calculating the net cost of the good or the value of an intermediate material, is suitable for determining whether the good complies with the regional value content under the Chapter referred to;
(f) whether a good that re-enters its territory after the good has been exported from its territory to the territory of the other Party for repair or alteration qualifies for duty-free treatment in accordance with Article 3-08 (Goods Re-Entered after Repair or Alteration); and
(g) such other matters as the Parties may agree.
2. Each Party shall adopt or maintain procedures for the issuance of advance tulings, including:
(a) the information reasonably required to process an application for a ruling;
(b) the authority of its customs administration, at any time during the course of an evaluation of an application, to request supplemental information from the person requesting the ruling;
(c) the obligation of its customs administration to issue an advance ruling, after it has obtained all necessary information from the person requesting an advance ruling; and
(d) the obligation of its customs administration to provide a full explanation of the reasons for the advance ruling.
3. Each Party shall apply an advance ruling to importations into its territory beginning on the date of its issuance or such later date as may be specified in the tuling, unless the advance ruling is modified or revoked under paragraph 5.
4. Each Party shall provide to any person requesting an advance ruling the same treatment, including the same interpretation and application of provisions of Chapter 4 (Rules of Origin) regarding adetermination of origin, as it provided to any other person to whom it issued an advance ruling, provided that the facts and circumstances are identical in all material respects.
5. An advanced ruling may be modified or revoked in the following cases:
(a) if the ruling is based on an error:
(i) of fact,
(ii) in the tariff classification of a good or a material that is the subject of the ruling,
(ii) in the application of a regional value-content requirement under Chapter 4 (Rules of Origin), or
(iv) in the application of the rules for determining whether a good that re-enters its territory after the good has been exported from its territory to the territory of the other Party for repair or alteration qualifies for duty-free treatment under Article 3- 08 (Goods Re-Entered after Repair or Alteration);
(b) if the ruling is not in accordance with an interpretation agreed by the Parties regarding Chapter 3 (National Treatment and Market Access for Goods) or Chapter 4 (Rules of Origin);
(c) if there is a change in the material facts or circumstances on which the ruling is based;
(d) to conform with a modification of Chapter 3 (National Treatment and Market Access for Goods), Chapter 4 (Rules of Origin), this Chapter or the Uniform Regulations; or
(e) to conform with an administrative or judicial decision or a change in the domestic law of the Party that issued the advance ruling.
6. Each Party shall provide that any modification or revocation of an advance ruling shall be effective on the date on which it is issued, or on such later date as may be specified therein, and shall not be applied to importations of a good that have occurred prior to that date, unless the person to whom the advance ruling was issued has not acted in accordance with its terms and conditions.
7. Each Party shall provide that where its customs administration examines the regional value content of a good for which it has issued an advance ruling , it shall evaluate whether:
(a) the exporter or producer has complied with the terms and conditions of the advance ruling;
(b) the exporter's or producer's operations are consistent with the material facts and circumstances on which the advance ruling is based; and
(c) the data and computations used in applying the basis or method for calculating value or allocating cost were correct in all material respects.
8. Each Party shall provide that where its customs administration determines that any requirement in paragraph 7 has not been satisfied, the customs administration may modify or revoke the advance ruling as the circumstances may warrant.
9. Each Party shall provide that where its customs administration determines that an advance ruling was based on incorrect information, the person to whom it was issued shall not be subject to penalties provided the person demonstrates that it used reasonable care and acted in good faith in presenting the facts and circumstances on which the ruling was based.
10. Each Party shall provide that where an advance ruling is issued to a person that has misrepresented or omitted material facts or circumstances on which the tuling is based or has failed to act in accordance with the terms and conditions of the tuling, the customs administration that issued the ruling may apply such measures as the circumstances may warrant.
11. The Parties shall provide that the person to whom an advance ruling has been issued shall only use it for as long as the facts or circumstances on which the ruling is based continue. Should they no longer apply, the person to whom the advance ruling was issued may present information to enable the administration that issued the ruling to proceed under paragraph 5.
12. No good subject to a verification of origin or to a review or appeal body in the territory of either of the Parties shall be the subject of an advance ruling.
Article 5-10. Penalties
1. Each Party shall establish or maintain measures imposing criminal, civil or administrative penalties for violations of its laws and regulations relating to this Chapter.
2. Nothing in Article 5-03(1)(d), 5-03(2), 5-04(2) or 5-07(7) shall be construed to prevent a Party from applying such measures as the circumstances may warrant.
Article 5-11. Review and Appeal
1. Each Party shall grant the same rights of review and appeal of determinations of origin and advance rulings as it provides to its importers to exporters or producers in the other Party:
(a) who complete and sign a certificate or declaration of origin for a good that has been the subject of a determination of origin pursuant to Article 5-07(10); or