(f) exchanging information on matters related to subparagraphs (a) through (c) which may, directly or indirectly, affect trade between the Parties with a view to minimizing their negative effects on trade and seeking mutually acceptable alternatives.
Article 2.13. Definition
For the purposes of this Chapter, except as otherwise specified:
base rate of customs duty means the most-favoured-nation (MFN) import customs
duty rate applied on 1 January 2021 provided by each Party, on which the successive reductions set out in Annex 2-A shall be applied;
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;
duty-free means free of customs duty;
goods and products shall be understood to have the same meaning, unless the context otherwise requires;
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;
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.
Chapter 3. RULES OF ORIGIN AND IMPLEMENTATION PROCEDURES
Section A. Rules of Origin
Article 3.1. Originating Goods
Except as otherwise provided in this Chapter, the following goods shall be considered as originating in a Party:
(a) goods wholly obtained or produced in a Party as defined in Article 3.2 (Goods Wholly Obtained);
(b) goods produced in a Party exclusively from originating materials; or
(c) goods produced from non-originating materials in a Party, provided that the goods conform to a regional value content of no less than 40%, except for the goods listed in the Annex 3-A (Product Specific Rules of Origin) which must comply with the requirements specified therein;
and meet other applicable provisions of this Chapter.
Article 3.2. Goods Wholly Obtained
For the purposes of Article 3.1(a), the following goods shall be considered as wholly obtained or produced in a Party:
(a) live animals born and raised in a Party;
(b) goods obtained from live animals referred to in subparagraph (a);
(c) plant and plant products grown, and harvested, picked or gathered in a Party;
(d) goods obtained from hunting, trapping, fishing, aquaculture, gathering or capturing conducted in a Party;
(e) minerals and other naturally occurring substances not included in subparagraphs (a) through (d), extracted or taken from its soil, waters, seabed or subsoil beneath the seabed;
(f) goods extracted from the waters, seabed or subsoil beneath the seabed outside the territorial waters of a Party, provided that the Party has the right to exploit such waters, seabed or subsoil beneath the seabed in accordance with international law and its domestic law;
(g) goods of sea fishing and other marine products taken from the sea outside the territorial waters of a Party by a vessel registered in a Party and flying the flag of that Party;
(h) goods processed or made on board factory ships registered in a Party and flying the flag of that Party, exclusively from goods referred to in subparagraph (g);
(i) scrap and waste derived from processing operations in a Party, which fit only for the recovery of raw materials;
(j) used goods consumed and collected there which fit only for the recovery of raw materials; or
(k) goods produced entirely in a Party exclusively from the goods referred to in subparagraphs (a) to (j).
Article 3.3. Regional Value Content
1. The Regional Value Content (RVC) of a good shall be calculated on the basis of following method：
RVC = V-VNM / V x 100%
where:
RVC is the regional value content, expressed as a percentage;
V is the value of the product, as defined in the Customs Valuation Agreement, adjusted on an FOB basis; and
VNM is the value of the non-originating materials, including materials of undetermined origin, as provided in paragraph 2.
2. The value of the non-originating materials shall be:
(a) the value of the materials, as defined in the Customs Valuation Agreement, adjusted on a CIF basis; or
(b) the earliest ascertained price paid or payable for the non-originating materials in a Party where the working or processing takes place. When the producer of a product acquires non-originating materials within that Party, the value of such materials shall not include freight, insurance, packing costs, and any other costs incurred in transporting the material from the supplier’s warehouse to the producer’s location.
3. The value of the non-originating materials used by the producer in the production of a product shall not include, for the purposes of calculating the regional value content of the product, pursuant to paragraph 1, the value of non-originating materials used to produce originating materials that are subsequently used in the production of the product.
Article 3.4. De Minimis
A product that does not meet tariff classification change requirements, pursuant to Annex 3-A (Product Specific Rules of Origin), shall nonetheless be considered to be an originating product, provided that:
(a) the value of all non-originating materials, determined pursuant to Article 3.3 (Regional Value Content), including materials of undetermined origin, that do not meet the tariff classification change requirement does not exceed 10% of the FOB value of the given product; and
(b) the product meets all the other applicable criteria of this Chapter.
Article 3.5. Accumulation
Originating materials of a Party, used in the production of a good in the other Party, shall be considered to be originating in the latter Party.
Article 3.6. Minimal Operations or Processes
1. Notwithstanding Article 3.1(c), a good shall not be considered as originating, if it has only undergone one or more of the following operations or processes:
(a) preservation operations to ensure the goods remain in good condition during transport and storage;
(b) simple assembly of parts of articles to constitute a complete article, or disassembly of products into parts;
(c) packing, unpacking or repacking operations for the purposes of sale or presentation;
(d) slaughtering of animals;
(e) washing, cleaning, removal of dust, oxide, oil, paint or other coverings;
(f) ironing or pressing of textiles;
(g) simple painting and polishing operations;
(h) husking, partial or total bleaching, polishing, and glazing of cereals and rice;
(i) operations to color sugar or form sugar lumps;
(j) peeling, stoning, and shelling of fruits, nuts and vegetables;
(k) sharpening, simple grinding or simple cutting;
(l) sifting, screening, sorting, classifying, grading, matching (including the making-up of sets of articles), cutting, slitting, bending, coiling, or uncoiling;
(m) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and other similar packaging operations;
(n) affixing or printing marks, labels, logos or other like distinguishing signs on products or their packaging;
(o) simple mixing of goods, whether or not of different kinds;
(p) mere dilution with water or another substance that does not materially alter the characteristics of the goods; or
(q) operations whose sole purpose is to ease port handling.
2. All operations in the production of a given good carried out in a Party shall be taken into account when determining whether the working or process undergone by that good is considered as minimal operations or processes referred to in paragraph 1.
Article 3.7. Fungible Materials
Where originating and non-originating fungible materials are used in the production of a good, the following methods shall be adopted in determining whether the materials used are originating:
(a) physical separation of the materials; or
(b) an inventory management method recognized in the generally accepted accounting principles of the exporting Party, provided that the inventory management method selected is used for at least 12 continuous months.
Article 3.8. Neutral Elements
1. In determining whether a good is an originating good, any neutral elements as defined in paragraph 2 shall be disregarded.
2. Neutral elements means a good used in the production, testing or inspection of another good but not physically incorporated into that good by itself, including:
(a) fuel, energy, catalysts and solvents;
(b) plant, equipment and machine, including devices and supplies used for testing or inspecting the goods;
(c) gloves, glasses, footwear, clothing, safety equipment and supplies;
(d) tools, dies and moulds;
(e) spare parts and materials used in the maintenance of equipment and buildings;
(f) lubricants, greases, compounding materials and other materials used in production or used to operate equipment and buildings; and
(g) any other goods that are not incorporated into the good but whose use in the production of the good can reasonably be demonstrated to be a part of that production.
Article 3.9. Packing, Packages and Containers
1. Containers and packing materials used for the transport of goods shall not be taken into account in determining the origin of the goods.
2. The origin of the packaging materials and containers in which goods are packaged for retail sale shall be disregarded in determining the origin of the goods, provided that the packaging materials and containers are classified with the goods.
3. Notwithstanding paragraph 2, where goods are subject to a regional value content requirement, the value of the packaging materials and containers used for retail sale shall be taken into account as originating materials or non-originating materials, as the case may be, in calculating the regional value content of the goods.
Article 3.10. Accessories, Spare Parts and Tools
1. Accessories, spare parts or tools presented and classified with the good shall be considered as part of the good, provided that:
(a) they are invoiced together with the good; and
(b) their quantities and values are commercially customary for the good.
2. Where a good is subject to change in tariff classification criterion set out in Annex 3-A (Product Specific Rules of Origin), accessories, spare parts, or tools described in paragraph 1 shall be disregarded when determining the origin of the good.
3. Where a good is subject to a regional value content requirement, the value of the accessories, spare parts or tools described in paragraph 1 shall be taken into account as originating materials or non-originating materials, as the case may be, in calculating the regional value content of the good.
Article 3.11. Sets
Sets, as defined in General Rule 3 of the Harmonized System, shall be regarded as originating when all component products are originating. Nevertheless, when a set is composed of originating and non-originating products, the set as a whole shall be regarded as originating, provided that the value of the non-originating products does not exceed 15% of total value of the set, determined pursuant to Article 3.3 (Regional Value Content).
Article 3.12. Direct Consignment
1. Preferential tariff treatment under this Agreement shall only be granted to originating products which are transported directly between the Parties.
2. Notwithstanding paragraph 1, goods whose transport involves transit through one or more non-Parties, with or without trans-shipment or temporary storage of up to 180 days in such non-Parties, shall still be considered as directly transported between the Parties, provided that:
(a) the transit entry of the goods is justified for geographical reason or by consideration related exclusively to transport requirements;
(b) the goods do not undergo any other operation there other than unloading and reloading, or any operation required to keep them in good condition;
(c) the goods do not enter into trade or consumption there; and
(d) the goods remain under customs control during transit in those non-Parties.
3. Compliance with paragraph 2 shall be evidenced by presenting the customs authority of the importing Party, during the importation, either with customs documents of the non-Parties, or with any other documents to the satisfaction of the customs authority of the importing Party.
Section B. Implementation Procedures
Article 3.13. Certificate of Origin
1. In order for originating goods to benefit from preferential tariff treatment, the Certificate of Origin, as set out in Annex 3-B (Certificate of Origin), will be issued by the authorized body or bodies of the exporting Party, upon written application of the exporter, producer, or under the exporter’s responsibility, by his authorized representative together with the supporting documents.
The Certificate of Origin shall:
(a) contain a unique certificate number;
(b) cover one or more goods under one consignment;
(c) state the basis on which the goods are deemed to qualify as originating for the purposes of this Chapter;
(d) contain security features, such as specimen signatures or stamps as advised to the importing Party by the exporting Party; and
(e) be completed in English.
2. The Certificate of Origin shall be issued before or at the time of shipment. It shall be valid for one year from the date of issuance in the exporting Party.
3. Each Party shall inform the customs authority of the other Party of the name of each authorized body, as well as relevant contact details, and shall provide details of security features for relevant forms, including the official seals to be used by each authorized body and documents used by each authorized body, prior to the issuance of any certificate by that body. Any change in the information provided above shall be promptly notified to the customs authority of the other Party.
4. A Certificate of Origin may be issued retrospectively within one year from the date of shipment, bearing the words “ISSUED RETROSPECTIVELY” and remains valid for one year from the date of shipment, if it is not issued before or at the time of shipment due to force majeure, involuntary errors, omissions or other valid causes.
5. In cases of theft, loss, or accidental destruction of a Certificate of Origin, the exporter or producer may make a written request to the authorized bodies of the exporting Party for issuing a certified copy. The certified copy shall bear the words “CERTIFIED TRUE COPY of the original Certificate of Origin number ___ dated___”. The certified copy shall be valid during the term of validity of the original Certificate of Origin.
6. In circumstances where a certificate of origin contains incorrect information submitted by the importer, according to the domestic law, the customs authority of the importing Party gives the importer the opportunity to present a new certificate within a certain period. The new Certificate of Origin shall be valid for the remainder of the period established in the original Certificate of Origin.
7. Orthographic and typing errors in a Certificate of Origin shall not cause this document to be rejected if these errors are not such as to create doubts concerning the correctness of the statements made in this document.
Article 3.14. Retention of Origin Documents
1. Each Party shall require its producers, exporters and importers to retain documents that prove the originating status of the goods as well as the fulfillment of the other requirements of this Chapter for at least three years or any longer time in accordance with that Party’s domestic law.
2. Each Party shall require that its authorized bodies retain copies of Certificates of Origin and other related supporting documents for at least three years or any longer time in accordance with that Party’s domestic law.
Article 3.15. Obligations Regarding Importations
Except as otherwise provided in this Chapter, the importer claiming for preferential tariff treatment shall:
(a) indicate in the customs declaration that the good qualifies as an originating good;
(b) possess a valid Certificate of Origin at the time the import customs declaration referred to in subparagraph (a) is made; and
(c) submit the valid Certificate of Origin and other documentary evidence established in Article 3.12 related to the importation of the goods, upon request of the customs administration of the importing Party.
Article 3.16. Refund of Import Customs Duties or Deposit
1. Each Party shall provide that, where an originating good was imported, importer may, no later than one year after the date of importation, apply for refund of any excess duties, deposit, or guarantee paid as a result of the good not having been accorded preferential tariff treatment, on presentation to the customs authority of the importing Party of:
(a) a valid Certificate of Origin demonstrating that the good was originating at the time of importation; and
(b) such other documentation relating to the importation of the good as the importing Party may require.
2. Without prejudice to paragraph 1, each Party may require, in accordance with its respective laws and regulations, that the importer shall formally declare to the customs authority at the time of importation that the good in question qualifies as originating as a precondition for claiming preferential tariff treatment, failing which no preferential tariff treatment is to be granted.
Article 3.17. Verification of Origin
1. For the purposes of determining the authenticity or accuracy of the Certificate of Origin, the originating status of the products concerned, or the fulfillment of the other requirements of this Chapter, the customs authority of the importing Party may conduct origin verification based on risk analysis and at random or whenever the customs authority of the importing Party has reasonable doubts, by means of：
(a) requests for additional information from the importer;
(b) requests to the customs authority or authorized body of the exporting Party to verify the origin of a product;
(c) such other procedures as the competent authorities of the Parties may jointly decide; or
(d) conducting verification visit to the exporting Party, when necessary, in a manner to be jointly determined by the customs authorities of the Parties.
2. The customs authority of the importing Party requesting verification to the exporting Party shall specify the reasons and provide any documents and information justifying the verification.
3. The competent authority receiving a request for verification, under paragraph1. a) or 1. b), shall respond to the request promptly and reply within 90 days, from the date of raising of the verification request. Upon request of the importer, exporter or producer, the above-mentioned period can be extended to another 90 days.
4. If the customs authority of the importing Party decides to suspend the granting of preferential treatment to the goods concerned while awaiting the results of the verification, the goods shall be released upon submission of guarantee, except as otherwise provided in the domestic law of the importing Party.