f) is exported within the period established by the Party in its legislation;
g) is imported or admitted in quantities not greater than reasonable in accordance with its intended use; and
h) imported or otherwise admissible into the territory of the Party under its legislation.
3. In the case of the goods referred to in paragraph 1(c) and in addition to the conditions set forth in paragraph 2, the goods must only be imported for the purpose of lifting future orders or for the supply of services.
4. If any of the conditions imposed by a Party under paragraphs 2 and 3 have not been complied with, the Party may apply the customs duty and any other charges that would normally be due for the importation or final admission of the good plus any other charges or penalties established under its law.
5. Each Party, through its customs authority, shall adopt procedures to facilitate the expeditious release of goods imported under this Article. To the extent possible, where such merchandise accompanies a national or resident of the other Party who is requesting temporary entry, such procedures shall allow the merchandise to be cleared simultaneously with the entry of that national or resident.
6. Each Party shall allow a good imported or temporarily admitted under this Article to be exported through a customs port other than the port through which it was imported or admitted.
7. Exceptionally, the importation or temporary admission may conclude with the total or partial destruction of the merchandise in case of an act of God, force majeure or the request of the beneficiary, as provided in the national legislation of each Party.
8. No Party:
a) shall prohibit a vehicle or container used in international transportation that has entered its territory from another Party from leaving its territory by any route that has a reasonable connection with the prompt and economical departure of such vehicle or container;
b) shall not require a bond or impose any penalty or charge solely on the grounds that the port of entry of the vehicle or container is different from the port of departure;
c) condition the release of any obligation, including any bond, which it has applied to the entry of a vehicle or container into its territory, on its departure through a particular port; and
d) shall require that the vehicle or carrier bringing a container into its territory from the territory of the other Party be the same vehicle or carrier that brings it into the territory of the other Party.
9. For purposes of paragraph 8, vehicle means a truck, tractor-trailer, tractor, trailer or trailer unit, locomotive or railcar or other railroad equipment.
Article 3.12. Goods Reimported after Repair or Alteration
1. No Party shall apply a customs duty to a good, regardless of its origin, that has been re-entered into its territory after having been temporarily exported from its territory to the territory of the other Party for repair or alteration, regardless of whether such repairs or alterations could have been carried out in the territory of the Party from which the good was exported for repair or alteration.
2. No Party shall apply a customs duty to a good that, regardless of its origin, is temporarily admitted from the territory of another Party for the purpose of being repaired or altered.
3. Repairs or alterations do not include an operation or process, that destroys the essential characteristics of a good or converts it into a new or commercially different good, or transforms an unfinished good into a finished good.
Article 3.13. Duty-free Imports for Commercial Samples of Negligible Value and Printed Advertising Materials
Each Party shall allow duty-free importation of commercial samples of negligible value and printed advertising materials imported from the territory of the other Party, regardless of their origin, but may require that:
a) such samples are imported solely for the purpose of soliciting orders for goods or services supplied from the territory of the other Party, or from another non-Party; or
b) such advertising materials are imported in packages containing not more than one copy of each form and that neither the materials nor the packages are part of a larger consignment.
Section F. Market Access Committee
Article 3.14. Market Access Committee
1. The Parties establish a Market Access Committee to be composed of representatives of the Parties:
a) in the case of Mexico, by the Ministry of Economy or its successor; and
b) in the case of Peru, by the Ministry of Foreign Trade and Tourism or its successor.
2. The Committee shall meet preferably once a year on an ordinary basis, and at any time on an extraordinary basis, at the request of any of the Parties.
3. Ordinary meetings shall be held within 60 days following the request, and in the case of extraordinary meetings, such period shall not exceed 30 days.
4. The Committee shall have the following functions:
a) monitor compliance with, application and correct interpretation of the provisions of this Chapter and its Annexes, including future modifications of the Harmonized System to ensure the obligations of each Party under this Agreement;
b) serve as a discussion forum for the Parties to consult and resolve issues related to this Chapter, in coordination with any body established in the Agreement;
c) address obstacles to trade in goods between the Parties, in particular those related to the application of non-tariff measures covered by Section D of this Chapter, and, if appropriate, submit these matters to the Commission for its consideration;
d) make relevant recommendations to the Commission on matters within its competence;
e) coordinate the exchange of information on trade in goods between the Parties;
f) to promote cooperation in the implementation and administration of this Chapter; and
g) such other functions as may be entrusted to it by the Commission.
Chapter IV. RULES OF ORIGIN AND ORIGIN-RELATED PROCEDURES
Article 4.1. Definitions
For the purposes of this Chapter, the following definitions shall apply:
Customs Valuation Agreement: the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, including its interpretative notes, which form part of the WTO Agreement;
aquaculture: the process of cultivation of fish, crustaceans, mollusks and other aquatic invertebrates, even when cultivation is carried out from fry (1) or non-originating larvae;
competent authority: the authority that, according to the legislation of each Party, is responsible for the application of this Chapter:
a) in the case of Mexico, for certification and control of origin, the Ministry of Economy or its successor, and for verification of origin, the Tax Administration Service of the Ministry of Finance and Public Credit or its successor; and
b) in the case of Peru, the Ministry of Foreign Trade and Tourism or its successor;
valid certificate of origin: one that complies with the provisions set forth in this Chapter;
class of motor vehicles: any of the following categories of motor vehicles:
a) motor vehicles of subheading 8701.20, tariff item 8702.10.aa or 8702.90.aa, subheading 8704.10, 8704.22, 8704.23, 8704.32 or 8704.90 or heading 87.05 or 87.06;
b) motor vehicles of subheading 8701.10 or 8701.30 to 8701.90;
c) motor vehicles of tariff item 8702.10.bb or 8702.90.bb or subheading 8704.21 or 8704.31; or
d) motor vehicles covered by subheading 8703.21 to 8703.90;
shipping containers and packaging materials: those used to protect merchandise during transportation, not including containers and materials in which merchandise is packed for retail sale;
exporter: a person located in the territory of a Party from which it exports a good;
importer: a person located in the territory of a Party into which a good is imported;
model line: a number of motor vehicles having the same platform or the same model name;
material: includes raw materials, inputs, ingredients, intermediate products, parts, components, pieces and goods used in the production of another good;
commodity: any good, product, article or material;
fungible goods or fungible materials: goods or materials that are interchangeable for commercial purposes and whose properties are essentially identical;
identical goods: goods that are the same in all respects, as defined in the Customs Valuation Agreement;
simple mixture: an activity, including dilution with water or other substance, that does not substantially alter the characteristics of the good. A simple mixture does not include a chemical reaction;
model name: the word, group of words, letter(s), number(s) or similar designation assigned to a motor vehicle by a marketing division of a motor vehicle assembler for:
a) differentiate the motor vehicle from other motor vehicles using the same platform design;
b) associating the motor vehicle with other motor vehicles using a different platform design; or
c) indicate a platform design; plant: a building or buildings next to, but not necessarily contiguous with, machinery, apparatus and plant under the control of a producer used in the production of any of the following:
a) light vehicles and heavy vehicles;
b) automotive parts; or
c) automotive component and subcomponent assemblies;
platform: the primary load-bearing structural assembly of a motor vehicle that determines the basic size of that motor vehicle and is the structural base that supports the powertrain, and serves as the attachment for the suspension components of the motor vehicle in various types of frames, such as for body assembly or dimensional frame and unit body;
CIF price: the price of the imported goods, including insurance and freight costs to the port or place of entry in the country of importation;
FOB price: the price of the goods free on board, irrespective of the means of transport, at the point of shipment direct from the seller to the buyer;
Generally Accepted Accounting Principles: the recognized consensus or substantial support authorized in the territory of a Party with respect to the recording of revenues, expenses, costs, assets and liabilities, the disclosure of information and the preparation of financial statements. These standards may include broad guidelines of general application, as well as detailed practical rules and procedures;
production: the cultivation, raising, extraction, harvesting, fishing, hunting, manufacturing, assembling or processing of a commodity;
producer: a person located in the territory of a Party who grows, raises, harvests, harvests, fishes, hunts, manufactures, assembles or processes a good;
chemical reaction: processes, including biochemical processes, that result in a molecule with new structure, breaking intramolecular bonds and forming new intramolecular bonds or altering the spatial arrangement of atoms in a molecule;
preferential tariff treatment: the preferential customs tariff applicable to a good, in accordance with this Agreement;
customs value: the transaction value of a good, being the price actually paid or payable for such good, determined according to the criteria for the application of the agreement for the interpretation of Article Vil of the Customs Valuation Agreement.
motor vehicle: an automobile, a commercial truck, a light truck, a medium truck, or a motor carrier, according to the following descriptions:
a) automobile: a vehicle intended for the transport of up to 10 persons and falling within subheading 8703.21 to 8703.33, tariff item 8703.90.aa or 8706.00.aa;
b) commercial truck: a vehicle with or without chassis, intended for the transportation of goods or more than 10 persons, with a gross vehicle weight of up to 2,727 kg. and which is provided for in subheading 8702.10, tariff item 8702.90.cc, subheading 8703.21 to 8703.33, tariff item 8703.90.aa, 8704.21.aa, 8704.31.aa, 8705.20.aa, 8705.40.aa or 8706.00.aa;
c) light truck: a vehicle with or without chassis, intended for the transportation of goods or more than 10 persons, with a gross vehicle weight of more than 2,727 kg. but not more than 7,272 kg. and that is established in subheading 8702.10, tariff item 8702.90.cc, 8704.21.aa, 8704.22.aa, 8704.31.aa, 8704.32aa, 8705.20.aa, 8705.40.aa or 8706.00.aa;
d) medium truck: a vehicle with or without chassis, intended for the transport of goods or more than 10 persons, with a gross vehicle weight of more than 7,272 kg. but not more than 8,864 kg. and falling under subheading 8702.10, tariff item 8702.90.cc, 8704.22.aa, 8704.32.aa, 8705.20.aa, 8705.40.aa or 8705.40.aa, or 8706.00.aa; or
e) motor vehicle: any motor vehicle whose gross vehicle weight exceeds 8,864 kilograms and corresponds to one of the following types:
i) integral bus: a motor vehicle without a chassis and with an integrated body, intended for the transport of 10 or more persons, classified in any of the following tariff items: 8702.10.cc or 8702.90.dd;
ii) heavy truck / bus: a motor vehicle with a chassis for the transport of goods or 10 or more persons, classified in any of the following tariff items: 8702.10.dd, 8702.90.e6e, 8704.22.bb, 8704.23.aa, 8704.32.bb, 8705.20.aa, 8705.40.aa or 8706.00.bb; or
iii) tractor-trailer: a motor vehicle with 2 or 3 axles used to transport goods by pulling trailers or semi-trailers, classified in tariff item 8701.20.aa.
Article 4.2. Originating Goods
1. Unless otherwise provided in this Chapter, they shall be considered as originating:
a) goods wholly obtained or produced entirely in the territory of one or both Parties:
i) minerals extracted in the territory of one or both Parties;
ii) harvested in the territory of one or both Parties;
iii) live animals, born and raised in the territory of one or both Parties;
iv) goods obtained from hunting, fishing or aquaculture in the territory of one or both Parties;
v) goods obtained from live animals in the territory of one or both Parties, without involving the slaughter of such animals;
vi) fish, crustaceans and other marine species obtained outside the territory of the Parties by vessels registered, registered, flagged or reputed as such by any of the Parties, according to their legislation, through modalities such as affiliation, leasing or chartering;
vii) goods produced on board factory ships from the goods identified in item (vi), provided that such factory ships are registered, registered, flagged or reputed as such by any of the Parties, according to their legislation, through modalities such as affiliation, leasing or chartering;
viii) goods obtained by a Party or a person of a Party, from the seabed or subsoil, outside the territory of the Parties, provided that the Party has rights to exploit that seabed or subsoil;
ix) waste and scrap derived from production in the territory of one or both Parties or from used goods collected in the territory of one or both Parties, provided that such goods serve only for the recovery of raw materials; and
x) goods produced in the territory of one or both Parties, exclusively from the goods referred to in items (i) through (ix);
b) goods produced entirely in the territory of one or both Parties exclusively from originating materials in accordance with this Chapter; or
c) goods produced entirely in the territory of one or both Parties using non-originating materials, complying with the specific rules of origin set out in the Annex to Article 4.2.
2. Likewise, the merchandise must comply with the applicable provisions of this Chapter.
Article 4.3. Non-origin Conferring Transactions and Practices
1. A good shall not be considered originating, despite complying with the provisions of this Chapter, by virtue of having undergone only one of the following operations or practices:
a) operations intended to preserve goods during transport or storage, such as airing, cooling, freezing, removal of damaged parts, drying or addition of substances;
b) leaks or dilutions in water or any other substance that does not materially alter the characteristics of the goods;
c) cooking, cooling and freezing operations;
d) simple mixing operations;
e) dedusting, screening, classifying, sorting, washing, filtering, macerating, drying or cutting;
f) packing, repacking, wrapping, repacking or packaging for retail sale;
g) the application of trademarks, labels or similar distinctive signs;
h) cleaning, including removal of rust, grease, paint or other coatings;
i) fractionation into lots or volumes, shelling or shelling;
j) the assembly of parts and components that are classified as one good, in accordance with Rule 2(a) of the General Rules for the Interpretation of the Harmonized System;
k) any price-fixing activity or practice in respect of a good for which it can be shown, on the basis of sufficient evidence, that its purpose is to evade compliance with the provisions of this Chapter;
l) any operation of packaging a good for wholesale sale;
m) the disassembly of goods into parts or pieces; or
n) the accumulation of two or more operations or practices indicated in subparagraphs (a) through (m).
2. The provisions of this Article shall prevail over the specific rules of origin set forth in the Annex to Article 4.2.
Article 4.4. Regional Content Value
1. When a good is required to meet a regional value content requirement to determine whether such good is originating, the calculation shall be based on the following method:
VCR = VT- VMN/VT x 100
where:
VCR: is the regional value content of the merchandise, expressed as a percentage;
VT: is the transaction value of a good on an FOB basis, adjusted in accordance with the provisions of Articles 1 to 8, 15 and their corresponding interpretative notes of the Customs Valuation Agreement;
VMN: is the value of all non-originating materials used by the producer in the production of the good.
2. For the purposes of paragraph 1, when the exporter is different from the producer, the latter may consider in the transaction value the costs of freight, insurance, packaging and all other costs incurred in transportation to the point where the exporter receives the goods within the territory where the producer is located.
3. To calculate the regional value content of a good classified in heading 87.01 through 87.07, the producer may average the calculation over its fiscal year or period, using any of the following categories, either on the basis of all motor vehicles in that category, or on the basis of only motor vehicles in that category that are exported to the territory of the other Party:
a) the same model line of the same class of motor vehicles, produced in the same plant in the territory of a Party;
b) the same class of motor vehicles, produced in the same plant in the territory of a Party; or
c) the same model line of motor vehicles produced in the territory of a Party.
Article 4.5. Value of Materials
1. For the purposes of Articles 4.4 and 4.9, the value of a material shall be:
a) in the case of a material imported directly by the producer of the merchandise, the customs value of the country of importation, in accordance with the provisions of Articles 1 to 8, 15 and their corresponding interpretative notes of the Customs Valuation Agreement;
b) in the case of a material purchased by the producer in the territory where the goods are produced:
i) in the case of originating material, the transaction value, taking into account freight, insurance, packing costs and all other costs incurred in transporting the material from the supplier's warehouse to the producer's location; or
ii) in the case of non-originating material, the transaction value. However, freight, insurance, packing costs and all other costs incurred in transporting the material from the supplier's warehouse to the producer's location shall not be considered; or
c) in the case of an intermediate material or where there is a relationship between the producer of the good and the seller of the material that influences the price actually paid or payable for the material, the sum of all costs incurred in the production of the material, including overhead. In addition, the amount of profit equivalent to that which would have been obtained in the normal course of trade, in accordance with the Customs Valuation Agreement, may be added.
2. In determining the value of the non-originating materials of a good, in accordance with Article 4.4, the producer of the good shall not take into account the value of the non-originating materials used by another producer in the production of an originating material or of a material that has been designated as an intermediate.
Article 4.6. Intermediate Materials
1. For purposes of calculating the regional value content under Article 4.5, the producer of a good may designate as an intermediate material any self-produced material used in the production of the good, provided that such material complies with Article 4.2.
2. If a material designated as an intermediate material is subject to a regional value content requirement, no self-produced material used in its production that is itself subject to a regional value content requirement may be designated by the producer as an intermediate material.
Article 4.7. Cumulation of Origin between the Parties
1. Goods or materials originating in a Party, incorporated into a good in the territory of the other Party, shall be considered as originating in the territory of the latter.
2. The production carried out by a producer in a Party may be cumulated with that of one or more producers in the territory of that Party or of the other Party, so that the production of the materials incorporated in the good is considered to be carried out by that producer, provided that the good meets the requirements set out in Article 4.2.
Article 4.8. Extended Cumulation of Origin
1. Where each Party has established a preferential trade agreement with a non-Party, and for purposes of determining whether a good is originating under this Agreement, a material that is produced in the territory of such non-Party, which would be originating under this Agreement if it were produced in the territory of one or both Parties, may be considered as originating in the territory of the exporting Party.
2. For the application of paragraph 1, each Party shall apply provisions equivalent to those indicated in that paragraph with the non-Party. The Parties may also establish such other conditions as they deem necessary for the implementation of paragraph 1.
Article 4.9. De Minimis
1. A good produced in the territory of one or both Parties shall be considered to be originating if the value of all non-originating materials used in the production of that good that do not meet the applicable tariff classification change requirement does not exceed 10 percent of the transaction value of the good, adjusted in accordance with Article 4.5.