(b) an inventory management method recognized in the generally accepted accounting principles of the exporting Party, and shall be used for at least one fiscal year.
Article 24. Neutral Elements
In determining whether a good is an originating good, the origin of the following neutral elements shall be disregarded:
(a) fuel, energy, catalysts and solvents;
(b) equipment, 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 25. 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. Where goods are subject to a change in tariff classification criterion set out in Annex 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. However, if the 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 26. Accessories, Spare Parts and Tools
1. Where a good is subject to change in tariff classification criterion set out in Annex 2, accessories, spare parts, tools or instructional and information materials presented with the good upon importation shall be disregarded when determining the origin of the good, provided that these are classified with and not invoiced separately from the good.
2. Where a good is subject to a regional value content requirement, the value of the accessories, spare parts, tools or, instructional and information materials 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.
3. This Article shall apply only where the quantities and values of said accessories, spare parts, tools or, instructional and information materials are customary for the good.
Article 27. 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 3 months in such non-Parties, shall still be considered as directly transported between the Parties, provided that:
(a) the transit entry of goods is justified for geographical reason or by consideration related exclusively to transport requirements;
(b) the goods do not enter into trade or consumption there;
(c) the goods do not undergo any other operation there other than unloading and reloading, or any operation required to keep them in good condition; and
(d) the goods remain under customs control during transit in those non-Parties.
3. Compliance with the provisions set out in paragraph 2 shall be evidenced by presenting the customs authority of the importing Party 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. Origin Implementation Procedures
Article 28. Certificate of Origin
1. A Certificate of Origin as set out in Annex 3 shall be issued by the authorized bodies of a Party on application by the exporter or producer, provided that the goods can be considered as originating in that Party subject to the provision of this Chapter.
2. 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.
3. The Certificate of Origin shall be issued before or at the time of shipment. It shall be valid for 1 year from the date of issuance in the exporting Party.
4. 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 any security features for relevant forms and documents used by each authorized body, prior to the issuance of any certificates by that body. Any change in the information provided above shall be promptly notified to the customs authority of the other Party.
5. If the Certificate of Origin has not been issued before or at the time of shipment due to force majeure or justifiable reasons, the Certificate of Origin may be issued retrospectively but no longer than 1 year from the date of shipment, bearing the words “ISSUED RETROSPECTIVELY”.
6. For cases of theft, loss or accidental destruction of a Certificate of Origin, the exporter or producer may make a written or electronic request to the authorized bodies of the exporting Party for issuing a certified copy, provided that the original copy previously issued has been verified not to be used. 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.
Article 29. 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 3 years or in accordance with its 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 3 years or in accordance with its domestic law.
3. The records to be maintained may include electronic records and shall be maintained in accordance with the domestic laws and practices of each Party.
Article 30. Obligations Regarding Importations
Unless 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 original Certificate of Origin and other documentary evidence related to the importation of the goods, upon requirements of the customs authority of the importing Party.
Article 31. Refund of Import Customs Duties or Deposit
1. Where a Certificate of Origin is not submitted to the customs authority of the importing Party at the time of importation pursuant to Article 30, upon the request of the importer, the customs authority of the importing Party may impose the applied non-preferential customs duties, or require a guarantee equivalent to the full amount of the customs duties on that good, provided that the importer formally declares to the customs authority at the time of importation that the good in question qualifies as an originating good.
2. The importer may apply for a refund of any excess customs duties imposed or guarantee paid within the period specified in the legislation of the importing Party.
Article 32. Waiver of Certificate of Origin
1. Notwithstanding Article 30, a Party shall waive the requirements for the presentation of a Certificate of Origin to any consignments of originating goods of a customs value not exceeding US$ 600 or its equivalent amount in the Party's currency.
2. Waivers provided for in paragraph 1 shall not be applicable when it is established by the customs authority of the importing Party that the importation forms part of a series of importations that may reasonably be considered to have been undertaken or arranged for the purpose of avoiding the submission of Certificate of Origin.
Article 33. Verification of Origin
1. For the purpose of determining the authenticity or accuracy of the Certificate of Origin, the originating status of the goods concerned, or the fulfillment of the other requirements of this Chapter, the customs authority of the importing Party may conduct origin verification by means of:
(a) requests for additional information from the importer;
(b) requests for additional information from the exporter or producer in the territory of the exporting Party;
(c) requests to the customs authority of exporting Party to verify the origin of a good; or
(d) such other procedures as the customs authority of the Parties may jointly decide.
2. A verification process under paragraph 1 shall only be initiated when there are reasonable grounds to doubt the accuracy or authenticity of the origin of the goods concerned.
3. 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.
4. The customs authority of the exporting Party referred to in paragraph 1 receiving a request for verification, shall respond to the request promptly and reply within 6 months from the date of raising verification request.
5. The importer, exporter, and producer referred to in paragraph 1 receiving a request for additional information, shall respond to the request promptly and reply within 6 months from the date of request.
6. If no reply is received within the periods mentioned above, or if the reply does not contain sufficient information to determine the authenticity of the documents or the originating status of the goods in question, the requesting customs authority may deny preferential tariff treatment.
Article 34. Denial of Preferential Tariff Treatment
Except as otherwise provided in this Chapter, the importing Party may deny claim for preferential tariff treatment, if:
(a) the goods do not meet the requirements of this Chapter;
(b) the importer, exporter or producer fails to comply with the relevant requirements of this Chapter;
(c) the Certificate of Origin does not meet the requirements of this Chapter; or
(d) in a case according to Article 33.6.
Article 35. Article 35: Electronic Origin Data Exchange System
The Parties shall develop an Electronic Origin Data Exchange System to ensure the effective and efficient implementation of this Chapter in a manner jointly determined by the Parties.
Article 36. Self-Declaration of Origin
The Parties agree to explore the possibilities to facilitate an exporter or importer to make a self-declaration on origin to streamline the documentary requirement.
Article 37. Contact Points
1. Each Party shall establish a contact point which shall have the general responsibility of coordinating and implementing this Chapter. The contact points will be:
(a) for China, General Administration of Customs or its successor; and
(b) for Maldives, Maldives Customs Service or its successor.
2. Each Party shall provide the other Party with the name(s) of the designated contact point and the contact details of the relevant official(s) in that organization, including telephone, facsimile, email and any other relevant details.
3. Each Party shall notify the other Party promptly of any change of its contact point or any amendments to the details of the relevant official(s).
Article 38. Consultation
1. The contact point of each Party may at any time request consultations with the other Party on any matter arising from the operation or implementation of this Chapter to ensure this Chapter is administered effectively, uniformly and consistently in order to achieve the spirit and objectives of this Chapter. Such consultations shall be conducted through the relevant contact points, and shall take place within 30 days of the request, unless the Parties otherwise determine.
2. In the event that such consultations fail to resolve any matter, the requesting Party may refer the matter to the Committee on Customs referred to in Article 54 for further consideration.
Chapter 5. CUSTOMS PROCEDURES AND TRADE FACILITATION
Article 39. Definitions
For the purposes of this Chapter:
customs administration means:
for China, the General Administration of Customs of the People’s Republic of China; and
for Maldives, Maldives Customs Service;
customs law means the statutory and regulatory provisions relating to the importation, exportation, movement or storage of goods, the administration and enforcement of which are specifically charged to the customs authority, and any regulations made by the customs authority under their statutory powers;
customs procedures mean the treatment applied by the customs administration to goods and means of transport that are subject to customs control; and
means of transport mean various types of vessels, vehicles and aircrafts which enter or leave the territory that carry persons and/or goods.
Article 40. Scope and Objectives
1. This Chapter shall apply, in accordance with the Parties’ respective international obligations and domestic customs law, to customs procedures applied to goods traded between the Parties and to the movement of means of transport between the Parties.
2. The objectives of this Chapter are to:
(a) simplify and harmonize customs procedures of the Parties;
(b) facilitate trade between the Parties; and
(c) promote cooperation between the customs administrations, within the scope of this Chapter.
Article 41. Facilitation
1. The Parties shall ensure that their customs procedures and practices are predictable, consistent and transparent, to facilitate trade.
2. The Parties shall use efficient customs procedures, based, as appropriate, on international standards, aiming to reduce costs and unnecessary delays in trade between them, in particular the standards and recommended practices of the World Customs Organization, including the principles of the revised International Convention on the Simplification and Harmonization of Customs Procedures (Revised Kyoto Convention).
3. The Parties shall limit controls, formalities and the number of documents required in the context of trade in goods between the Parties to those necessary and appropriate to ensure compliance with legal requirements, thereby simplifying, to the greatest extent possible, the related procedures.
4. The customs administration of each Party shall periodically review its customs procedures with a view to exploring options for their simplification and the enhancement of mutually beneficial arrangements to facilitate international trade.
Article 42. Transparency
1. Each Party shall promptly publish, including on the Internet, its laws, regulations, and where applicable, administrative rules or procedures, of general application, relevant to trade in goods between the Parties.
2. Each Party shall designate one or more enquiry points to address enquiries from interested persons on customs matters, and shall make available on the Internet information concerning procedures for making such enquiries.
3. To the extent practicable and in a manner consistent with its laws and regulations, each Party shall publish, in advance, on the Internet, draft laws and regulations of general application relevant to trade between the Parties, with a view to affording the public, especially interested persons, an opportunity to provide comments.
4. Each Party shall ensure, to the extent possible, that a reasonable interval is provided between the publication of new or amended laws and regulations of general application relevant to trade between the Parties and their entry into force.
5. Each Party shall administer, in a uniform, impartial and reasonable manner, its laws and regulations of general application relevant to trade between the Parties.
Article 43. Customs Valuation
The Parties shall determine the customs value of goods traded between them in accordance with the provisions of Article VII of GATT 1994 and the Customs Valuation Agreement.
Article 44. Tariff Classification
The Parties shall apply the International Convention on the Harmonized Commodity Description and Coding System to goods traded between them.
Article 45. Cooperation
1. To the extent permitted by their laws and regulations, the customs administrations of the Parties shall assist each other, in relation to:
(a) the implementation and operation of this Chapter;
(b) capacity building on customs procedures for enhancing trade facilitation; and
(c) such other issues as the Parties may mutually agree.
2. Each Party shall endeavor to provide the other Party with timely notice of any significant modification of its customs laws, regulations or procedures that are likely to substantially affect the operation of this Agreement.
Article 46. Advance Rulings
1. Each Party shall provide for written advance rulings to be issued to a person described in paragraph 2(a) concerning tariff classification and whether goods are originating under this Agreement.
2. Each Party shall adopt or maintain procedures for issuing written advance rulings, which shall:
(a) provide that an exporter, importer or any person with a justifiable cause, or a representative thereof, may apply for an advance ruling, before the date of importation of the goods that are the subject of the application. A Party may require that an applicant have legal representation or registration in its territory;
(b) include a detailed description of the information required to process a request for an advance ruling;
(c) allow its customs administration, at any time during the course of an evaluation of an application for an advance ruling, to request that the applicant provide additional information necessary to evaluate the request;
(d) ensure that an advance ruling be based on the facts and circumstances presented by the applicant and any other relevant information in the possession of the decision-maker; and
(e) provide that the ruling be issued, in the national language of the issuing customs administration, to the applicant, expeditiously on receipt of all necessary information, within 90 days.
3. A Party that declines to issue an advance ruling shall promptly notify the applicant in writing, setting forth the basis for its decision to decline to issue the advance ruling.
4. A Party may reject requests for an advance ruling where the additional information requested in accordance with paragraph 2(c) is not provided within the specified period.
5. Each Party shall endeavor to make information on advance rulings which it considers to be of significant interest to other traders, publicly available, taking into account the need to protect confidential information.
6. Subject to paragraph 7, each Party shall apply an advance ruling to importations into its territory through any port of entry, beginning on the date the advance ruling was issued or on any other date specified in the advance ruling. The Party shall ensure the same treatment of all importations of goods subject to the advance ruling during the validity period regardless of the importer or exporter involved, where the facts and circumstances are identical in all material respects.
7. A Party may modify or revoke an advance ruling, consistent with this Agreement, where there is a change in the laws or regulations; where incorrect information was provided or relevant information was withheld; where there is a change in a material fact; or where there is a change in the circumstances on which the ruling was based.
Article 47. Review and Appeal
Each Party shall, in accordance with its domestic laws and regulations, provide that the importer, exporter or any other person affected by its determinations on a customs matter, have access to:
(a) a level of administrative review of determinations by its customs administrations independent of the official or office responsible for the decision under review; and
(b) judicial review of the determinations subject to its laws and regulations.
Article 48. Application of Information Technology
1. Each Party shall apply information technology to support customs operations, where it is cost-effective and efficient, particularly in the paperless trading context, taking into account developments in this area within relevant international organizations, including the World Customs Organization.
2. Each Party shall endeavor to establish, as far as practicable, an electronic means for communication of relevant information required by its customs administration and other relevant border agencies to facilitate the international movement of goods and means of transport.
Article 49. Risk Management
1. Each Party shall determine which persons, goods or means of transport are to be examined and the extent of the examination, based on risk management.
2. Each Party shall work to further enhance the use of risk management techniques in the administration of its customs procedures so as to facilitate the clearance of low-risk goods and allow resources to focus on high-risk goods.
3. Risk management shall be applied in such a manner that it does not create arbitrary or unjustifiable discrimination under the same conditions or disguised restriction on international trade.
Article 50. Release of Goods
1. Each Party shall adopt or maintain simplified customs procedures for the efficient release of goods in order to facilitate trade between the Parties. For greater certainty, this paragraph shall not require a Party to release goods where its requirements for release have not been met.
2. In accordance with paragraph 1, each Party shall adopt or maintain procedures that:
(a) provide for the release of goods as rapidly as possible after arrival, provided all other regulatory requirements have been met;
(b) as appropriate, provide for advance electronic submission and processing of information before the physical arrival of goods with a view to expediting the release of goods; and
(c) may allow importers to obtain the release of goods prior to meeting all import requirements of that Party if the importer provides sufficient and effective guarantees and where it is decided that neither further examination, physical inspection nor any other submission is required.
3. Each Party shall endeavor to adopt and maintain a system under which goods in need of urgent clearance can obtain prompt customs clearance.