Korea, Republic of - Peru FTA (2010)
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Title

Free Trade Agreement between the Republic of Korea and Peru (2010)

Preamble

FREE TRADE AGREEMENT BETWEEN THE REPUBLIC OF KOREA AND THE REPUBLIC OF PERU PREAMBLE The Republic of Peru (hereinafter referred to as "Peru") and the Republic of Korea (hereinafter referred to as "Korea"), collectively referred to as "the Parties", resolved to:
STRENGTHEN the special bonds of friendship and cooperation between them;
PROMOTE broad-based economic development in order to reduce poverty and generate opportunities for sustainable economic growth;
ENSURE a predictable legal framework for trade, business, and investment;
CREATE new employment opportunities and effectively improve labor conditions and living standards in their respective territories;
AVOID distortions to their trade;
PROMOTE transparency and prevent and combat corruption, including bribery, and human rights violations-related rackets in international trade and investment;
IMPLEMENT this Agreement in a manner consistent with environmental protection and conservation and basic human and fundamental rights protection and promote sustainable development;
REAFFIRM their consent to strengthen and enhance the multilateral trading system as reflected by the World Trade Organization; and
REAFFIRM their commitment to the "Bogor Goals" of free and open trade and investment of the Asia-Pacific Economic Cooperation;
HAVE AGREED as follows:

Body

Chapter ONE. Initial Provisions and Definitions

Article 1.1. Establishment of a Free Trade Area

The Parties to this Agreement, consistent with Article XXIV of GATT 1994 and Article V of GATS, hereby establish a Free Trade Area.

Article 1.2. Relation to other Agreements

1. The Parties affirm their existing rights and obligations with respect to each other under the WTO Agreement.
2. In the event of any inconsistency between this Agreement and other agreements to which both Parties are party, the Parties shall immediately consult with each other with a view to finding a mutually satisfactory solution, taking into consideration general principles of international law.
3. If any provision of the WTO Agreement that the Parties have incorporated into this Agreement is amended and accepted by the Parties at the WTO, such amendment shall be deemed incorporated automatically into this Agreement.

Article 1.3. Extent of Obligations

Each Party shall ensure within its territory the observance of all obligations and commitments under this Agreement by its respective central, regional, and local levels of government.

Article 1.4. General Definitions

For purposes of this Agreement, unless otherwise specified:
AD Agreement means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, contained in Annex 1A to the WTO Agreement;
Agriculture Agreement means the Agreement on Agriculture, contained in Annex 1A to the WTO Agreement;
CBD means the Convention on Biological Diversity, concluded at Rio de Janeiro on June 5, 1992;
central level of government means:
(a) for Peru, the national level of government; and
(b) for Korea, the central level of government; covered investment means, with respect to a Party, an investment in its territory of an investor of the other Party existing on the date of entry into force of this Agreement, as well as investments established, acquired, or expanded thereafter; customs authority means the authority that is responsible under the law of a Party for the administration and enforcement of customs laws and regulations;
customs duty includes any duty or a charge of any kind imposed on, or in connection with, the importation of goods, but does not include any:
(a) charge equivalent to an internal tax imposed consistently with Article III:2 of GATT 1994;
(b) anti-dumping, countervailing, or safeguard duty that is applied in accordance with Article VI of GATT 1994, the AD Agreement, the SCM Agreement, Article XIX of GATT 1994, the Safeguards Agreement, and Article 5 of the Agriculture Agreement; or
(c) fee or other charge in connection with importation commensurate with the cost of services rendered; Customs Valuation Agreement means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, contained in Annex 1A to the WTO Agreement;
days means calendar days;
enterprise means any entity constituted or organized under applicable law, whether or not for profit, and whether privately or governmentally owned or controlled, including any corporation, trust, partnership, sole proprietorship, joint venture, or other association;
enterprise of a Party means an enterprise constituted or organized under a Party's law;
existing means in effect on the date of entry into force of this Agreement;
GATS means the General Agreement on Trade in Services, contained in Annex 1B to the WTO Agreement; GATT 1994 means the General Agreement on Tariffs and Trade 1994, contained in Annex 1A to the WTO Agreement;
goods of a Party means domestic products as these are understood in GATT 1994 or such goods as the Parties may agree and includes originating goods of that Party;
Harmonized System (hereinafter referred to as "HS") means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, and Chapter Notes;
heading means the first four digits in the tariff classification number under the HS;
IMF means the International Monetary Fund;
Joint Commission means the Joint Commission established under Article 22.1 (Joint Commission);
local level of government means:
(a) for Peru, the provincial and local municipalities; and
(b) for Korea, a local government as defined in the Local Autonomy Act;
measure includes any law, regulation, procedure, requirement, or practice;
national means:
(a) for Peru, a natural person who has the nationality of Peru by birth, naturalization, or option in accordance with Articles 52 and 53 of the Political Constitution of Peru (Constitución Política del Perú) and other relevant domestic legislation, or a permanent resident in Peru; and
(b) for Korea, a Korean national within the meaning of the Nationality Act; originating means qualifying in accordance with the rules of origin established under Chapter Three (Rules of Origin);
person means a natural person or an enterprise; person of a Party means a national or an enterprise of a Party;
regional level of government means:
(a) for Peru, regional government in accordance with the Political Constitution of Peru (Constitución Política del Perú) and other applicable legislation; and
(b) for Korea, "regional level of government" is not applicable since a regional government does not exist in Korea;
Safeguards Agreement means the Agreement on Safeguards, contained in Annex 1A to the WTO Agreement;
SCM Agreement means the Agreement on Subsides and Countervailing Measures, contained in Annex 1A to the WTO Agreement;
subheading means the first six digits in the tariff classification number under the HS;
territory (1) means:
(a) for Peru, the mainland territory, the islands, the maritime zones, and the air space above them over which Peru exercises sovereignty or sovereign rights and jurisdiction in accordance with its domestic law and international law; and
(b) for Korea, the land, maritime, and air space over which Korea exercises sovereignty, and those maritime areas, including the seabed and subsoil adjacent to and beyond the outer limit of the territorial seas over which it may exercise sovereign rights or jurisdiction in accordance with its domestic law and international law;
TRIPS Agreement means the Agreement on Trade-Related Aspects of Intellectual Property Rights, contained in Annex 1C to the WTO Agreement;
WTO means the World Trade Organization; and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on April 15, 1994. 

(1) For greater certainty, the definition of and references to "territory" contained in this Agreement apply exclusively for purposes of determining the geographical scope of application of this Agreement.

Chapter TWO. National Treatment and Market Access for Goods

Article 2.1. Scope of Application

Except as otherwise provided in this Agreement, this Chapter shall apply to trade in goods of a Party.

Section A. NATIONAL TREATMENT

Article 2.2. National Treatment

1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994, including its interpretative notes, and to this end Article III of GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.
2. Paragraph 1 shall not apply to the measures set out in Annex 2A.

Section B. ELIMINATION OF CUSTOMS DUTIES

Article 2.3. Elimination of Customs Duties

1. Except as otherwise provided in this Agreement, neither Party shall increase any existing customs duty, or adopt any new customs duty, on an originating good.
2. Except as otherwise provided in this Agreement, each Party shall eliminate its customs duties on originating goods in accordance with its Schedule set out in Annex 2B.
3. The Parties may deny preferential tariff treatment under this Agreement for used goods. For purposes of this paragraph, used goods includes those identified as such in headings or sub-headings of the HS and those reconstructed, repaired, recovered, remanufactured, or any other similar goods that, after having been used, have been subject to a process to restore their original characteristics or specifications, or to restore the functionality they had when they were new. (1)
4. Upon request of a Party, the Parties shall consult to consider accelerating the elimination of customs duties set out in their Schedules set out in Annex 2B.
5. An agreement between the Parties to accelerate the elimination of a customs duty on a good, shall supersede any duty rate or staging category determined pursuant to their 1 This paragraph shall not apply to used vehicles that are classified in heading 8703 of the HS, provided that they do not fall within the scope of the measures referred to in Annex 2A. Accordingly, each Party shall provide preferential tariff treatment under this Agreement for such used vehicles. Schedules set out in Annex 2B for such good, when approved by the Parties in accordance with Article 22.1 (Joint Commission) and their applicable legal procedures.
6. For greater certainty, a Party may:
(a) raise a customs duty to the level established in its Schedule set out in Annex 2B following a unilateral reduction for the respective year; or
(b) maintain or increase a customs duty as authorized by the Dispute Settlement Body of the WTO or in accordance with Chapter Twenty-Three (Dispute Settlement).

(1) This paragraph shall not apply to used vehicles that are classified in heading 8703 of the HS, provided that they do not fall within the scope of the measures referred to in Annex 2A. Accordingly, each Party shall provide preferential tariff treatment under this Agreement for such used vehicles.

Section C. SPECIAL REGIMES

Article 2.4. Waiver of Customs Duties

1. Neither Party shall adopt any new waiver of customs duties, or expand with respect to existing recipients or extend to any new recipient the application of an existing waiver of customs duties, where the waiver is conditioned, explicitly or implicitly, on the fulfillment of a performance requirement.
2. Neither Party shall, explicitly or implicitly, condition on the fulfillment of a performance requirement the continuation of any existing waiver of customs duties.

Article 2.5. Temporary Admission of Goods

1. Each Party shall grant duty-free temporary admission for the following goods, regardless of their origin:
(a) professional equipment, including equipment for the press or television, software, and broadcasting and cinematographic equipment, necessary for carrying out the business activity, trade, or profession of a person who qualifies for temporary entry in accordance with the laws of the importing Party;
(b) goods intended for display or demonstration;
(c) commercial samples and advertising films and recordings; and
(d) goods admitted for sports purposes.
2. Each Party, upon request of the person concerned and for reasons its customs authority considers valid, shall extend the time limit for temporary admission beyond the period initially fixed.
3. Neither Party shall condition the duty-free temporary admission of a good referred to in paragraph 1, other than to require that the good:
(a) be used solely by or under the personal supervision of a national or resident of the other Party in the exercise of business activity, trade, profession or sport activity of that person;
(b) not be sold or leased while in its territory;
(c) be accompanied by a security in an amount no greater than 110 percent of the charges that would otherwise be owed on entry or final importation, releasable on exportation of the good;
(d) be capable of identification when exported;
(e) be exported on the departure of the person referred to in subparagraph (a), or within such other period related to the purpose of the temporary admission as the Party may establish, or within one year, unless extended;
(f) be admitted in no greater quantity than is reasonable for its intended use; and
(g) be otherwise admissible into the Party's territory under its law.
4. If any condition that a Party imposes under paragraph 3 has not been fulfilled, the Party may apply the customs duty and any other charge that would normally be owed on the good plus any other charges or penalties provided for under its law.
5. Each Party shall adopt or maintain procedures providing for the expeditious release of goods admitted under this Article. To the extent possible, such procedures shall provide that when such a good accompanies a national or resident of the other Party who is seeking temporary entry, the good shall be released simultaneously with the entry of that national or resident.
6. Each Party shall permit a good temporarily admitted under this Article to be exported through a customs port other than that through which it was admitted.
7. Each Party shall provide that its customs authority or other competent authority relieves the importer or another person responsible for a good admitted under this Article of any liability for failure to export the good on presentation of satisfactory proof to the customs authority of the importing Party that the good has been destroyed within the original period fixed for temporary admission or any lawful extension.
8. Neither Party shall:
(a) prevent a vehicle or container used in international traffic that enters its territory from the territory of the other Party from exiting its territory on any route that is reasonably related to the economic and prompt departure of such vehicle or container;
(b) require any security or impose any penalty or charge solely by reason of any difference between the port of entry and the port of departure of a vehicle or container;
(c) condition the release of any obligation, including any security, that it imposes in respect of the entry of a vehicle or container into its territory on its exit through any particular port of departure; and
(d) require that the vehicle or carrier bringing a container from the territory of the other Party into its territory be the same vehicle or carrier that takes the container to the territory of the other Party.
9. For purposes of paragraph 8, vehicle means a truck, a truck tractor, a tractor, a trailer unit or trailer, a locomotive, or a railway car or other railroad equipment.

Article 2.6. Goods Re-entered after Repair or Alteration

1. Neither Party shall apply a customs duty to a good, regardless of its origin, that reenters its territory after that good has been temporarily exported from its territory to the territory of the other Party for repair or alteration, regardless of whether such repair or alteration could be performed in the territory of the Party from which the good was exported for repair or alteration.
2. Neither Party shall apply a customs duty to a good, regardless of its origin, admitted temporarily from the territory of the other Party for repair or alteration.
3. For purposes of this Article, repair or alteration does not include an operation or process that:
(a) destroys a good's essential characteristics or creates a new or commercially different good; or
(b) transforms an unfinished good into a finished good.

Article 2.7. Duty-free Entry of Commercial Samples of Negligible Value and Printed Advertising Materials

Each Party shall grant duty-free entry to commercial samples of negligible value, and to printed advertising materials, imported from the territory of the other Party, regardless of their origin, but may require that:
(a) such samples be imported solely for the solicitation of orders for goods, or services provided from the territory, of the other Party or a non-Party; or
(b) such materials be imported in packets that each contain no more than one copy of each such material and that neither such materials nor packets form part of a larger consignment.

Article 2.8. Import and Export Restrictions

1. Except as otherwise provided in this Agreement, neither Party shall adopt or maintain any non-tariff measures that prohibit or restrict the importation of any good of the other Party or the exportation or sale for export of any good destined for the territory of the other Party, except in accordance with Article XI of GATT 1994 and its interpretative notes, and to this end Article XI of GATT 1994 and its interpretive notes are incorporated into and made part of this Agreement, mutatis mutandis.
2. The Parties understand that the GATT 1994 rights and obligations incorporated by paragraph 1 prohibit, in any circumstances in which any other form of restriction is prohibited, a Party from adopting or maintaining: (a) export and import price requirements, except as permitted in enforcement of countervailing and anti-dumping duty orders and undertakings;
(b) import licensing conditioned on the fulfillment of a performance requirement; or
(c) voluntary export restraints inconsistent with Article VI of GATT 1994, as implemented under Article 18 of the SCM Agreement and Article 8.1 of the AD Agreement.
3. Paragraphs 1 and 2 shall not apply to the measures set out in Annex 2A.
4. Neither Party shall, as a condition for engaging in importation or for the importation of a good, require a person of the other Party to establish or maintain a contractual or other relationship with a distributor in its territory.
5. Nothing in paragraph 4 prevents a Party from requiring the designation of an agent for purposes of facilitating communications between regulatory authorities of the Party and a person of the other Party.
6. For purposes of paragraph 4: distributor means a person of a Party who is responsible for the commercial distribution, agency, concession, or representation in the territory of that Party of goods of the other Party.

Article 2.9. Import Licensing

1. Neither Party shall adopt or maintain a measure that is inconsistent with the Import Licensing Agreement and to this end the Import Licensing Agreement is incorporated into and made part of this Agreement, mutatis mutandis.
2. (a) Promptly after the entry into force of this Agreement, each Party shall notify the other Party of its existing import licensing procedures, if any. The notification shall:
(i) include the information specified in Article 5 of the Import Licensing Agreement; and
(ii) be without prejudice as to whether the import licensing procedure is consistent with this Agreement.
(b) Before applying any new or modified import licensing procedure, a Party shall publish the new procedure or modification on an official government website or in a single official journal. The Party shall do so at least 20 days before the new procedure or modification takes effect. (2)
3. Neither Party shall apply an import licensing procedure to a good of the other Party unless the Party has met the requirements of paragraph 2 with respect to that procedure.

(2) This subparagraph shall not apply to a law or regulation that takes effect less than 20 days after it is published.

Article 2.10. Administrative Fees and Formalities

1. Each Party shall ensure that all fees and charges of whatever character imposed on or in connection with the importation or exportation of goods are consistent with Article VIII:1 of GATT 1994 and its interpretive notes. To this end, Article VIII:1 of GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.
2. Neither Party shall require consular transactions, including related fees and charges, in connection with the importation of any good of the other Party.
3. Each Party shall make available and maintain through the Internet a current list of the fees and charges it imposes in connection with importation or exportation.

Article 2.11. Export Taxes

Neither Party shall adopt or maintain any duty, tax, or other charge on the export of any good to the territory of the other Party, unless the duty, tax, or charge is also adopted or maintained on the good when destined for domestic consumption.

Article 2.12. State Trading Enterprises

The rights and obligations of the Parties with respect to state trading enterprises shall be governed by Article XVII of GATT 1994, its interpretative notes, and the Understanding on the Interpretation of Article XVII of GATT 1994, which are incorporated into and made part of this Agreement, mutatis mutandis. 2 This subparagraph shall not apply to a law or regulation that takes effect less than 20 days after it is published.

Article 2.13. Customs Valuation

1. The Customs Valuation Agreement and any successor Agreement shall govern the customs valuation rules applied by the Parties to their trade. To this end, the Customs Valuation Agreement and any successor Agreement, as well as the WTO Decisions of Committee on Customs Valuation, are incorporated into and made part of this Agreement, mutatis mutandis.
2. The custom laws of the Parties shall comply with Article VII of GATT 1994 and the Customs Valuation Agreement.

Section D. OTHER MEASURES

Article 2.14. Agricultural Safeguard Measures

1. Notwithstanding Article 2.3, a Party may apply a measure in the form of a higher import duty on an originating agricultural good listed in that Party's Schedule set out in Annex 2C, consistent with this Article if the aggregate volume of imports of that good in any year exceeds a trigger level as set out in its Schedule set out in Annex 2C.
2. The higher import duty under paragraph 1 shall not exceed the lesser of:
(a) the prevailing most-favored-nation (MFN) applied rate;
(b) the most-favored-nation (MFN) applied rate of duty in effect on the day immediately preceding the date of entry into force of this Agreement;
(c) the base rate set out in its Schedule set out in Annex 2B; or
(d) the duty set out in its Schedule set out in Annex 2C.
3. Neither Party shall apply or maintain an agricultural safeguard measure under this Article and at the same time apply or maintain, with respect to the same good:
(a) a bilateral safeguard measure under Chapter Eight (Trade Remedies);
(b) a measure under Article XIX of GATT 1994 and the Safeguards Agreement; or
(c) a special safeguard measure under Article 5 of the Agriculture Agreement.
4. A Party shall implement any agricultural safeguard measure in a transparent manner. Within 60 days after imposing an agricultural safeguard measure, the Party applying the measure shall notify the other Party in writing and provide the other Party with relevant data concerning the measure. Upon written request of the exporting Party, the Parties shall consult regarding application of the measure.
5. The Committee on Trade in Goods established under Article 2.17 may review and discuss the implementation and operation of this Article.
6. Neither Party shall apply or maintain an agricultural safeguard measure on an originating agricultural good if the period specified in the agricultural safeguard provisions of the Party's Schedule set out in Annex 2C has expired.

Article 2.15. Agricultural Export Subsidies

Neither Party shall introduce or reintroduce an export subsidy on an agricultural good destined for the territory of the other Party. (3) 

(3) Korea confirms that no subsidized agricultural goods is or will be exported to Peru.

Article 2.16. Price Band System

Peru may maintain its price band system established in its Supreme Decree N° 115-2001-EF and its amendments, with respect to the goods subject to the application of the system and listed in Annex 2D.

Section F. INSTITUTIONAL PROVISIONS

Article 2.17. Committee on Trade In Goods

1. The Parties hereby establish a Committee on Trade in Goods comprising officials of each Party. The meetings of the Committee and any ad-hoc working group shall be coordinated by the Ministry of Foreign Affairs and Trade of Korea and the Ministry of Foreign Trade and Tourism of Peru, or their respective successors.
2. The Committee shall meet upon request of a Party or the Joint Commission to consider matters arising under this Chapter, Chapter Three (Rules of Origin), Four (Origin Procedures) or Five (Customs Administration and Trade Facilitation).
3. The Committee's functions shall include, inter alia:
(a) promoting trade in goods between the Parties, including through consultations on accelerating, or broadening the scope of, tariff elimination under this Agreement and other issues as appropriate;
(b) addressing barriers to trade in goods between the Parties, especially those related to the application of non-tariff measures, and, if appropriate, referring such matters to the Joint Commission for its consideration;
(c) reviewing the future amendments to the HS to ensure that each Party's obligations under this Agreement are not altered, and consulting to resolve any conflicts between:
(i) subsequent amendments to HS 2007 and Annex 2B; or
(ii) Annex 2B and national nomenclatures; 
(d) consulting on and endeavoring to resolve any difference that may arise between the Parties on matters related to the classification of goods under the HS;
(e) consulting on matters related to this Chapter in coordination with other committees, working groups or any other bodies established under this Agreement; and
(f) establishing ad-hoc working groups with specific commands.
4. The Committee shall meet at least once a year unless otherwise agreed by the Parties. When special circumstances arise, the Committee shall meet at any time upon request of a Party.
5. The Parties hereby establish an ad-hoc Working Group on Trade in Agricultural and Fishery Goods. In order to solve any obstacle to the trade of agricultural and fishery goods between the Parties, the ad-hoc Working Group shall meet upon request of a Party. The ad-hoc Working Group shall report to the Committee on Trade in Goods.

(3) Korea confirms that no subsidized agricultural goods is or will be exported to Peru.

Section D. DEFINITIONS

Article 2.18. Definitions

For purposes of this Chapter:
advertising films and recordings means recorded visual media or audio materials, consisting essentially of images and/or sound, showing the nature or operation of goods or services offered for sale or lease by a person established or resident in the territory of a Party, provided that such materials are of a kind suitable for exhibition to prospective customers but not for broadcast to the general public;
agricultural goods means those goods referred to in Article 2 of the Agriculture Agreement;
commercial samples of negligible value means commercial samples having a value, individually or in the aggregate as shipped, of not more than the amount specified in a Party's laws, regulations, or procedures governing temporary admission, or so marked, torn, perforated, or otherwise treated that they are unsuitable for sale or use except as commercial samples;
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 purposes 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;
consumed means:
(a) actually consumed; or
(b) further processed or manufactured so as to result in a substantial change in the value, form, or use of the good or in the production of another good;
duty-free means free of customs duty;
export subsidies shall have the meaning assigned to that term in Article 1(e) of the Agriculture Agreement, including any amendment of that Article;
goods intended for display or demonstration includes their component parts, ancillary apparatus, and accessories;
goods temporarily admitted for sports purposes means sports requisites for use in sports contests, demonstrations, or training in the territory of the Party into whose territory such goods are admitted;
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;
Import Licensing Agreement means the Agreement on Import Licensing Procedures, contained in Annex 1A to the WTO Agreement;
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; and printed advertising materials means those goods classified in Chapter 49 of the HS, including brochures, pamphlets, leaflets, trade catalogues, yearbooks published by trade associations, tourist promotional materials, and posters, that are used to promote, publicize, or advertise a good or service, are essentially intended to advertise a good or service, and are supplied free of charge.

Chapter THREE. Rules of Origin

Article 3.1. Originating Goods

1. Except as otherwise provided in this Chapter, a good shall be treated as originating in a Party where the good is:
(a) wholly obtained or produced entirely in the territory of one or both of the Parties;
(b) produced entirely in the territory of one or both of the Parties, exclusively from originating materials under this Chapter; or
(c) produced entirely in the territory of one or both of the Parties using non-originating materials, satisfying the requirements under Annex 3A.
2. Additionally, the good shall satisfy all the other applicable requirements of this Chapter.

Article 3.2. Wholly Obtained or Produced Goods

For purposes of Article 3.1.1(a), the following goods are wholly obtained or produced entirely in the territory of one or both of the Parties:
(a) live animals born and raised in the territory of Korea or Peru;
(b) goods obtained from live animals born and raised in the territory of Korea or Peru;
(c) goods obtained by hunting, trapping, fishing, or aquaculture in the territory of Korea or Peru; (1)
(d) goods of sea-fishing and other goods taken from the sea outside the territory of a Party by vessels registered or recorded with a Party and flying its flag;
(e) goods produced on board factory ships, exclusively from the goods referred to in subparagraph (d), provided that such factory ships are registered or recorded with a Party and fly its flag;
(f) plants and plant products grown and harvested, picked, or gathered in the territory of Korea or Peru;
(g) mineral goods and other naturally occurring substances extracted from the soil, waters, seabed, or beneath the seabed of Korea or Peru;
(h) goods taken or extracted by a Party or a person of a Party from the seabed or beneath the seabed outside the territory of a Party, provided that the Party has rights to exploit them;
(i) waste and scrap derived from:
(i) manufacturing operations conducted in the territory of Korea or Peru; or
(ii) used goods collected in the territory of Korea or Peru, provided that such waste and scrap is fit only for the recovery of raw materials; and
(j) goods produced exclusively from goods specified in subparagraphs (a) through (i).

(1) Notwithstanding this subparagraph, goods of sea-fishing and other goods taken from the sea within the territories of the Parties by vessels registered or recorded with a non-Party and flying its flag shall not be regarded as wholly obtained or produced entirely in the territory of one or both of the Parties under this Article.

Article 3.3. Regional Value Content (rvc)

1. The regional value content of a good shall be calculated on the basis of one of the following methods:
(a) Method Based on Value of Non-Originating Materials (Build-down Method)

           FOB – VNM 
RVC = ------------------- x 100               
                FOB


(b) Method Based on Value of Originating Materials (Build-up Method)
               VOM
RVC=--------------------x 100
              FOB
where,
RVC is the regional value content, expressed as a percentage;
FOB is the free on board value of the good;
VNM is the value of the non-originating materials; and
VOM is the value of the originating materials.
2. The value of the non-originating materials shall be:
(a) in the case of a material imported directly by the producer of a good, the CIF value at the time of importation of the material;
(b) in the case of a material acquired by the producer in the territory where the good is produced, the transaction value, without considering the costs of freight, insurance, packing, and the other costs incurred in the transportation of the material from the warehouse of the supplier to the place where the producer is; or
(c) in the case of a self-produced material or where the relationship between the producer of the good and the seller of the material influences the price actually paid or payable for the material, the sum of all costs incurred in the production of the material, including general expenses. Additionally, it will be possible to add an amount for profit equivalent to the profit added in the normal course of trade.
3. The values referred to in this Article shall be determined in accordance with the Customs Valuation Agreement.

Article 3.4. Intermediate Materials

1. When an originating good is used in the subsequent production of another good, no account shall be taken of the non-originating materials contained in the originating good for purposes of determining the originating status of the subsequently produced good.
2. When a non-originating good is used in the subsequent production of another good:
(a) for purposes of calculating the value of the non-originating materials of the subsequently produced good, an account shall be taken only of the non-originating materials contained in the non-originating good; and
(b) for purposes of calculating the value of the originating materials of the subsequently produced good, an account shall be taken of the originating materials contained in the non-originating good.

Article 3.5. Non-qualifying Operations

1. The following operations shall be considered to be non-qualifying operations to confer the status of originating goods, whether or not the requirements under this Chapter are satisfied:
(a) operations to ensure the preservation of goods in good condition during transport and storage;
(b) changes of packing or breaking-up or assembly of packages;
(c) washing, cleaning, removal of dust, oxide, oil, paint, or other coverings;
(d) ironing or pressing of textiles;
(e) simple painting and polishing operations;
(f) husking, partial or total bleaching, polishing, and glazing of cereals and rice;
(g) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards, and all other simple packing operations;
(h) simple mixing of products, whether or not of different kinds;
(i) simple assembly of parts of articles to constitute a complete article or disassembly of products into parts; (j) slaughter of animals; or
(k) a combination of two or more operations specified in subparagraphs (a) through (j).
2. All operations carried out in a Party on a given good shall be considered together when determining whether the operations undergone by that good are to be regarded as non-qualifying within the meaning of paragraph 1.
3. For purposes of this Article:
(a) simple means activities which need neither special skills nor machines, apparatus or equipment especially produced or installed for carrying out the activity;
(b) simple mixing means activities which need neither special skills nor machines, apparatus, or equipment especially produced or installed for carrying out the activity but does not include chemical reaction; and
(c) chemical reaction means a process (including a biochemical process) which results in a molecule with a new structure by breaking intramolecular bonds and by forming new intramolecular bonds, or by altering the spatial arrangement of atoms in a molecule.

Article 3.6. Accumulation

1. Originating goods or materials from the territory of a Party, incorporated into a good in the territory of the other Party, shall be considered to be originating in the territory of the other Party.
2. Production carried out by a producer in the territory of a Party may be accumulated with the production of one or more producers in the territory of that Party or the other Party, in such way that the production of the materials incorporated into the good shall be considered as carried out by that producer, provided that the good satisfies the requirements established in Article 3.1 and all other applicable requirements in this Chapter.

Article 3.7. De Minimis

1. A good that does not undergo a change in tariff classification in accordance with Annex 3A shall nonetheless be considered to be originating if the value of all non-originating materials that have been used in its production and do not undergo the applicable change in tariff classification does not exceed 10 percent of the value of the good, determined in accordance with Article 3.3 if:
(a) the value of such non-originating materials is included in the value of non-originating materials for any applicable regional value content requirement; and
(b) the good satisfies all other applicable requirements in this Chapter.
2. Paragraph 1 shall not apply to goods classified in Chapters 1 through 14 and in Chapters 50 through 63 of the HS. A good classified in Chapters 50 through 63 of the HS, produced in the territory of a Party, shall be considered an originating good if the total weight of all non-originating fibers or yarns used in the production of the component that determines the tariff classification of that good, that do not undergo the applicable change in tariff classification, does not exceed 10 percent of the weight of the good.

Article 3.8. Fungible Goods or Materials

1. In determining whether a good or material is originating for purposes of granting preferential tariff treatment, any fungible goods or materials shall be distinguished by:
(a) physically separating each fungible good or material; or
(b) using any inventory management method, such as averaging, last-in-first-out (LIFO) or first-in-first-out (FIFO), recognized in the generally accepted accounting principles of a Party in which the production is performed or otherwise accepted by the Party in which the production is performed.
2. The inventory management method selected under paragraph 1 for a particular fungible good or material shall continue to be used for that good or material throughout the fiscal year of the person that selected the inventory management method.

Article 3.9. Sets

A set, as defined in General Rule 3 of the HS, shall be regarded as originating when all the components of the set are originating. Nevertheless, when a set is composed of originating and non-originating goods, the set as a whole shall be regarded as originating, provided that the value of the non-originating goods does not exceed 15 percent of the total value of the set, determined in accordance with Article 3.3.

Article 3.10. Accessories, Spare Parts, and Tools

The origin of the accessories, spare parts, or tools delivered with a good at the time of importation:
(a) shall be disregarded if the good is subject to a change in tariff classification requirement; and
(b) shall be taken into account as originating or non-originating materials, as the case may be, in calculating the regional value content of the good, if the good is subject to a regional value content requirement, provided that:
(a) the accessories, spare parts, or tools are not invoiced separately from the good, regardless of whether they appear specified or separately identified in the invoice itself; and
(b) the quantities and value of the accessories, spare parts, or tools are customary for the good.

Article 3.11. Packaging Materials and Containers for Retail Sale

1. Where packaging materials and containers are classified with a good, the origin of the packaging materials and containers in which the good is packaged for retail sale, shall be disregarded in determining the origin of the good, provided that:
(a) the good is wholly obtained or produced entirely in the territory of one or both of the Parties as set out in Article 3.1.1(a);
(b) the good is produced exclusively from originating materials, as set out in Article 3.1.1(b); or
(c) the good is subject to a change in tariff classification requirement set out in Annex 3A. 2. Where a good is subject to a regional value content requirement, the value of the packaging materials and containers used for retail sale shall be taken into account when determining the origin of the good.

Article 3.12. Packing Materials and Containers for Shipment

Packing materials and containers used to protect a good during its transportation shall not be taken into account when determining the origin of the good.

Article 3.13. Indirect Materials

1. For purposes of determining whether a good is originating, the origin of the indirect materials defined in paragraph 2 shall not be taken into account.
2. Indirect materials means articles used in the production of a good which are neither physically incorporated into it, nor form part of it, including:
(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 molds;
(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 3.14. Direct Transport

1. In order for originating goods to maintain their originating status, the goods shall be transported directly between the Parties.
2. Notwithstanding paragraph 1, the following shall be considered to be transported directly from the exporting Party to the importing Party:
(a) goods that are transported without passing through the territory of a non-Party; and
(b) goods whose transport involves transit through one or more non-Parties, with or without trans-shipment or temporary storage in such non-Parties, under control of the customs authority, provided that the goods do not:
(i) enter into trade or commerce there; and
(ii) undergo any operation there other than unloading and reloading, repacking, or any operation required to keep them in good condition.
3. Compliance with paragraphs 1 and 2 shall be demonstrated by presenting the following documentation to the customs authority of the importing Party:
(a) in the case of transit or trans-shipment, the transportation documents, such as the airway bill, the bill of lading, or the multimodal or combined transportation document, that certify the transport from the country of origin to the importing country, as the case may be; and
(b) in the case of storage, the transportation documents, such as the airway bill, the bill of lading, or the multimodal or combined transportation document, that certify the transport from the country of origin to the importing country, as the case may be, as well as the documents issued by the customs authority or other competent authority that authorized this operation in accordance with the domestic legislation of the non-Party.

Article 3.15. Principle of Territoriality

1. The conditions for acquiring originating status set out in Articles 3.1 through 3.14 must be fulfilled without interruption in the territory of one or both of the Parties.
2. Notwithstanding paragraph 1, an originating good exported from a Party to a non-Party shall when returned be considered to be non-originating unless it can be demonstrated to the satisfaction of the customs authorities in accordance with laws and regulations of the importing Party concerned that the returning good:
(a) is the same as that exported; and
(b) has not undergone any operation beyond that necessary to preserve it in good condition while being exported.
3. Notwithstanding paragraphs 1 and 2, goods listed in Annex 3B shall be considered to be originating in accordance with Annex 3B, even if such goods have undergone operations and processes outside the territories of the Parties.

Article 3.16. Definitions

For purposes of this Chapter:
aquaculture means the farming of aquatic organisms, including fish, mollusks, crustaceans, other aquatic invertebrates, and aquatic plants, from seedstock such as eggs, fry, fingerlings, and larvae, by intervention in the rearing or growth processes to enhance production, such as regular stocking, feeding, protection from predators, etc.;
CIF means the value of the good in the country of origin inclusive of the cost of insurance and freight up to the port or place of entry in the country of importation;
competent authority means:
(a) for Korea, the Ministry of Strategy and Finance, or its successor; and
(b) for Peru, the Ministry of Foreign Trade and Tourism, or its successor;
exporter means a person located in the territory of a Party from where a good is exported by such a person; FOB means the value of the good free on board, inclusive of the cost of transportation to the port or site of final shipment abroad, regardless of the mode of transportation;
fungible goods or materials means goods or materials that are interchangeable for commercial purposes and whose properties are essentially identical;
generally accepted accounting principles means recognized consensus or substantial authoritative support given 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. Generally accepted accounting principles may encompass broad guidelines for general application, as well as detailed standards, practices, and procedures; good means any merchandise, product, article, or material;
importer means a person located in the territory of a Party where a good is imported by such a person; material means a good that is used in the production of another good, including any components, ingredients, raw materials, parts, or pieces;
non-originating good or non-originating material means a good or material that does not qualify as originating under this Chapter;
originating material means a material that qualifies as originating under Article 3.1;
producer means a person who engages in the production of a good in the territory of a Party; and production means growing, raising, extracting, picking, gathering, mining, harvesting, fishing, trapping, hunting, manufacturing, processing, or assembling a good.

Chapter FOU. Origin Procedures

Article 4.1. Certificate of Origin

1. Each Party shall grant preferential tariff treatment in accordance with this Agreement to an originating good imported from the territory of the other Party on the basis of a Certificate of Origin.
2. In order to obtain preferential tariff treatment, an importer shall, in accordance with the procedures applicable in the importing Party, request preferential tariff treatment at the time of importation of an originating good.
3. A Certificate of Origin which certifies that a good being exported from the territory of a Party into the territory of the other Party qualifies as originating shall:
(a) be in a printed or electronic format; and
(b) be completed in English in conformity with the specimen and the instructions contained therein as set out in Annex 4B, which may be amended by agreement between the Parties.
4. Each Party shall:
(a) require an exporter in its territory to complete and sign a Certificate of Origin for any exportation of a good for which an importer may claim preferential tariff treatment upon importation of the good into the territory of the other Party; and
(b) provide that where an exporter in its territory is not the producer of the good, the exporter may complete and sign a Certificate of Origin on the basis of:
(i) its knowledge that the good qualifies as originating;
(ii) its reasonable reliance on the producer's written representation that the good qualifies as originating; or (iii) a completed and signed Certificate of Origin for the good voluntarily provided to the exporter by the producer.
5. A Certificate of Origin, duly completed and signed by an exporter or producer in a Party, may apply to:
(a) a single shipment of one or more goods into the territory of the other
(b) multiple shipments of identical goods to the same importer within any period specified in the Certificate of Origin, not exceeding 12 months from its date of issuance. Party; or

Article 4.2. Waiver of Certificate of Origin

A Certificate of Origin shall not be required where:
(a) the customs value of the importation does not exceed 1,000 US dollars or the equivalent amount in the currency of the importing Party, or such higher amount as may be established by the importing Party, unless the importing Party considers the importation to be carried out or planned for purposes of evading compliance with the Party's laws governing claims for preferential tariff treatment under this Agreement; or (b) it is a good for which the importing Party does not require the importer to present a Certificate of Origin demonstrating origin.

Article 4.3. Validity of Certificate of Origin

1. A Certificate of Origin shall be valid for one year from its date of issuance in the exporting Party and be submitted within the same period to the customs authority of the importing Party in accordance with applicable procedures of the importing Party.
2. Notwithstanding paragraph 1:
(a) in the event that the good referred to in the Certificate of Origin is temporarily admitted or stored under control of the customs authority of a non-Party, the term of validity of the Certificate of Origin may be extended for one additional year; and
(b) in the event that the good referred to in the Certificate of Origin is temporarily admitted or stored under control of the customs authority of the importing Party, the term of validity of the Certificate of Origin shall be suspended for the amount of time the customs authority has authorized such operations.

Article 4.4. Claims for Preferential Tariff Treatment

1. Except as otherwise provided for in this Chapter, each Party shall require an importer in its territory that claims preferential tariff treatment to:
(a) make a written statement in the customs declaration, based on a valid Certificate of Origin, indicating that the good qualifies as originating;
(b) have in its possession the Certificate of Origin at the time the statement referred to in subparagraph (a) is made;
(c) have in its possession the documents which certify that the requirements established in Article 3.14 (Direct Transport) have been met, where applicable; and
(d) submit the valid Certificate of Origin, as well as the documents referred to in subparagraph (c) to the customs authority, where it is required.
2. Where an importer has a reason to believe that a Certificate of Origin on which a statement was based contains incorrect information, the importer shall make a corrected statement and pay any customs duty owed.
3. Where an importer does not comply with any requirements under this Chapter or Chapter Three (Rules of Origin), preferential tariff treatment shall be denied to the goods imported from the territory of the exporting Party.

Article 4.5. Post-importation Claims for Preferential Tariff Treatment

Where a good was originating when it was imported into the territory of the importing Party, but the importer of the good did not claim preferential tariff treatment at the time of importation, that importer may, within the period specified in the Party's legislation or within one year following the date of importation, claim preferential tariff treatment and apply for a refund of any excess duties paid as a result of the good not having been accorded preferential tariff treatment, upon presentation to the importing Party of:
(a) a written or electronic declaration or statement, in accordance with the legislation of the importing Party, that the good was originating at the time of importation;
(b) a copy of a Certificate of Origin demonstrating that the good was originating; and
(c) such other documents related to the importation of the good as the importing Party may require.

Article 4.6. Record Keeping Requirements

1. The records that may be used to prove that a good covered by a Certificate of Origin is originating and has fulfilled other requirements under this Chapter and Chapter Three (Rules of Origin) include, but are not limited to:
(a) documents related to the purchase of, cost of, value of, and payment for, the exported good;
(b) documents related to the purchase of, cost of, value of, and payment for, all materials, including indirect materials, used in the production of the exported good;
(c) documents related to the production of the good in the form in which it was exported; and
(d) such other documents as the Parties may agree.
2. An exporter or producer in the territory of the exporting Party that completes and signs a Certificate of Origin shall keep, at least for five years from the date of issuance of the Certificate of Origin, the records referred to in paragraph 1.
3. An importer claiming preferential tariff treatment for a good imported into the territory of a Party shall keep, at least for five years from the date of importation of the good, the records related to the importation, including a copy of the Certificate of Origin.
4. An importer, exporter, or producer may choose to keep the records referred to in paragraph 1 in any medium that allows for prompt retrieval, including, but not limited to, digital, electronic, optical, magnetic, or written form.

Article 4.7. Formal Errors

1. Upon discovering formal errors in a Certificate of Origin, namely those that do not affect the originating status of the goods, the customs authority of the importing Party shall notify the importer of the errors that make the Certificate of Origin unacceptable.
2. The importer shall submit the appropriate correction of the Certificate of Origin within 30 days following the date of the receipt of the notification.
3. The correction shall contain the amendment, the date of the amendment, and, where applicable, the number of the Certificate of Origin and shall be signed by the person who issued the original Certificate of Origin.
4. If the importer fails to submit the correction within the period referred to in paragraph 2, the competent authority of the importing Party may proceed to conduct a verification under Article 4.8.

Article 4.8. Verification

1. For purposes of determining whether a good imported into the territory of a Party from the territory of the other Party qualifies as originating, the competent authority of the importing Party may conduct a verification by means of:
(a) written requests for additional information from the importer;
(b) written requests for additional information from the exporter or producer through the competent authority of the exporting Party;
(c) requests that the competent authority of the exporting Party assists in verifying the origin of the good; or (d) verification visits to the premises of an exporter or producer in the territory of the other Party, along with officials of the competent authority of the exporting Party, to observe the facilities and the production processes of the good and to review the records referred to in Article 4.6.1, including accounting files.
2. Requests made under paragraph 1(b) or 1(c) by the competent authority of the importing Party and all the information provided in response by the competent authority of the exporting Party shall be in English.
3. Where the importer, exporter, or producer fails to answer the written request for additional information that the importing Party made under paragraph 1(a) or 1(b) within 90 days following the date of the receipt of the request, the importing Party may deny preferential tariff treatment to the relevant good.
4. Where the competent authority of the importing Party requests assistance under paragraph 1(c):
(a) it shall provide the competent authority of the exporting Party with:
(i) the reasons why such assistance for verification is requested;
(ii) the Certificate of Origin of the good or a copy thereof; and
(iii) any information and documents as may be necessary for purposes of such request;
(b) the competent authority of the exporting Party shall provide the competent authority of the importing Party with a written statement in English, including facts and findings, and any supporting documents made available by the exporter or producer. This statement shall indicate clearly whether the documents are authentic and whether the good concerned is originating and has fulfilled other requirements under this Chapter and Chapter Three (Rules of Origin). If the good can be considered to be originating, the statement shall include a detailed explanation of how the good obtained the originating status; and
(c) in case where the competent authority of the exporting Party fails to provide the written statement within 150 days following the date of the receipt of the request or where the written statement provided does not contain sufficient information, the importing Party may deny preferential tariff treatment to the relevant good.
5. Where the competent authority of the importing Party intends to conduct a verification under paragraph 1(d), it shall notify in writing, 30 days prior to the verification visit, the competent authority of the exporting Party of such a request. In case where the competent authority of the exporting Party does not give its written consent to such a request within 30 days following the date of the receipt of the notification, the importing Party may deny preferential tariff treatment to the relevant good.
6. The importing Party shall, within one year following the initiation of the verification, notify the importer and the exporting Party, including the exporter or producer through the competent authority of the exporting Party, in writing, of the determination whether the good is originating, as well as factual findings and the legal basis for the determination.
7. Where, at the time of importation, the customs authority of the importing Party has a reasonable doubt on the origin of a good, the good may be released upon a deposit or the payment of duties, pending the outcome of the verification. The deposit or duties paid shall be refunded once the outcome of the verification confirms that the good qualifies as originating.
8. A Party may suspend preferential tariff treatment to an importer on any subsequent import of a good when the competent authority of the Party had already determined that an identical good was not eligible for such treatment, until it is demonstrated that the good complies with the requirements under this Chapter and Chapter Three (Rules of Origin).
9. A Party may provide all the information requested under this Article, supporting documents, and all other related information electronically to the other Party.

Article 4.9. Penalties

Penalties shall be imposed on any person who does not comply with this Chapter or Chapter Three (Rules of Origin).

Article 4.10. Confidentiality

1. A Party shall maintain the confidentiality of the information provided by the other Party in accordance with this Chapter, when requested by the other Party, and protect it from disclosure that could prejudice the competitive position of the person providing the information. Any violation of the confidentiality shall be treated in accordance with the domestic legislation of each Party.
2. The information provided in accordance with this Chapter shall not be disclosed without specific permission of the person or authority providing such information, except to the extent that it may be required to be disclosed in the context of judicial proceedings.

Article 4.11. Denial of Preferential Tariff Treatment

Except as otherwise provided in this Chapter, the importing Party may deny a claim for preferential tariff treatment or recover unpaid duties, where the good does not meet the requirements under this Chapter or Chapter Three (Rules of Origin).

Article 4.12. Modifications

1. If a Party considers that this Chapter or Chapter Three (Rules of Origin) needs to be modified, that Party may submit a modification proposal to the other Party, along with supporting rationale and studies.
2. A Party shall respond to the proposal made by the other Party within 180 days following the submission of the proposal. 3. In case where the Parties do not reach an agreement, either Party may refer the matter to the Committee on Customs, Origin, and Trade Facilitation established under Article 5.25 (Committee on Customs, Origin, and Trade Facilitation) for consideration.

Article 4.13. Implementation

1. During the period of five years following the date of entry into force of this Agreement, Annex 4A shall apply in lieu of Articles 4.1 and 4.6.1
2. After the period referred to in paragraph 1, Article 4.1 and 4.6 shall apply in lieu of Annex 4A.
3. During the period referred to in paragraph 1, the term Certificate of Origin used in Articles 4.2, 4.3, 4.4, 4.5, 4.7, 4.8, and 4.13 and Chapter Three (Rules of Origin) shall have the meaning of Proof of Origin referred to in Rule 1 of Annex 4A.
4. For purposes of accepting Certificates of Origin in an electronic format, the Parties shall, after one year following the date of entry into force of this Agreement, initiate the discussion on developing an electronic certification system to ensure the effective and efficient implementation of this Chapter, in a manner to be jointly determined by the competent authorities of the Parties.

Article 4.14. Uniform Regulations

1. The Parties may establish and implement, through their respective laws, regulations, or administrative policies, Uniform Regulations regarding the interpretation, application, and administration of this Chapter and Chapter Three (Rules of Origin).
2. Each Party shall implement any modification of, or addition to, the Uniform Regulations within such period as the Parties may agree. 1 Proofs of Origin issued in accordance with Annex 4A, until the last day of the calendar year in which Articles 4.1 and 4.6 start to apply, shall be accepted by the Parties. Persons and authorized bodies referred to in Rule 6 of Annex 4A shall keep the documents referred therein even if Annex 4A ceases to apply.

Article 4.15. Definitions

For purposes of this Chapter:
competent authority means:
(a) for Korea, the Korea Customs Service, or its successor; and
(b) for Peru, the Ministry of Foreign Trade and Tourism, or its successor; and identical goods means goods that are the same in all respects relevant to the particular rule of origin that qualify the goods as originating.

Chapter FIVE. Customs Administration and Trade Facilitation

Section A. TRADE FACILITATION

Article 5.1. Scope of Application and Objectives

1. This Chapter shall apply, in accordance with the Parties' respective international obligations and domestic customs laws, 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) ensure predictability, consistency, and transparency in the application of customs laws, including administrative procedures of the Parties;
(c) ensure the efficient and expeditious clearance of goods and movement of means of transport;
(d) facilitate trade between the Parties; and
(e) promote cooperation between the customs administrations, within the scope of application of this Chapter.

Article 5.2. Competent Authorities

1. The competent authorities for the administration of this Chapter are:
(a) for Korea, the Ministry of Strategy and Finance, or its successor; and
(b) for Peru, the Ministry of Foreign Trade and Tourism, or its successor.
2. Each competent authority shall designate one or more contact points for purposes of this Chapter and provide contact details of such contact points to the competent authority of the other Party. Competent authorities of the Parties shall promptly notify each other of any changes to the contact details of their contact points.

Article 5.3. Facilitation

1. Each Party shall ensure that its customs procedures and practices are predictable, consistent, and transparent and facilitate trade.
2. Customs procedures of each Party shall, where possible and to the extent permitted by its respective customs laws, conform with the trade-related instruments of the World Customs Organization (hereinafter referred to as "WCO") to which the Party is a party, including those of the International Convention on the Simplification and Harmonization of Customs Procedures (Kyoto Convention) (as amended) and Protocol of Amendment to the International Convention on the Simplification and Harmonization of Customs Procedures (Revised Kyoto Convention).
3. Each Party shall provide for clearance of goods with minimum documentation requirements and make electronic systems accessible to customs users and use information technology that expedites procedures for the release of goods.
4. Customs administrations of the Parties shall facilitate the clearance, including the release, of goods in administering their procedures.
5. Each Party shall endeavor to provide a focal point, electronic or otherwise, through which its traders may submit all regulatory information that is required in order to obtain the clearance, including the release, of goods.

Article 5.4. Customs Valuation

The Parties shall apply Article VII of GATT 1994 and the Customs Valuation Agreement to goods traded between them.

Article 5.5. Tariff Classification

The Parties shall apply the International Convention on the Harmonized Commodity Description and Coding System to goods traded between them.

Article 5.6. Review and Appeal

1. Each Party shall ensure that with respect to its determinations (1) on customs matters including origin of goods and preferential tariff treatment and other import, export, and transit requirements and procedures, persons concerned who are the subject of such determinations (2) shall have access to:
(a) a level of administrative review independent of the employee or office that issued the determinations; and (b) judicial review of the determinations.
2. A producer or exporter may provide, upon request of the reviewing authority, information directly to the Party conducting the administrative review, and may request such Party to treat that information as confidential in accordance with the rules applicable in that Party. This information shall be provided in accordance with the rules determined by the Parties.

(1) For purposes of this Article, a determination, if made by Peru, means an administrative act. 
(2) It shall be understood that these persons need a representative domiciled in the territory of the Party where the review or appeal is made. 

Article 5.7. Advance Rulings

1. The Parties shall adopt or maintain procedures for the issuance of advance rulings on the following matters:
(a) tariff classification;
(b) execution of the rules of origin; and
(c) such other matters as the Parties may agree.
2. Procedures for the issuance of these advance rulings shall include at least: 
(a) a maximum term of 120 days for issuance or such shorter period as may be established by a Party, starting from the date on which all the requirements by the competent authority are met;
(b) conditions for their validation, revocation, and publication; and
(c) sanctions
3. Upon written request of importers, exporters, or producers, each Party shall issue, through its customs administration or competent authority, written advance rulings on customs matters, in particular on tariff classification and rules of origin, in accordance with the legislation of each Party.
4. Detailed procedures, and in particular deadlines, for the issuance, use, and revocation of advance rulings shall be set out in the legislation of each Party.
5. Peru shall fully implement the obligations under paragraph 1 from January 1, 2012.

Article 5.8. Use of Automated Systems In the Paperless Trading Environment

1. The customs administrations shall use 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 the WCO.
2. The customs administrations shall endeavor to use information technology that expedites procedures for the release of goods, including the submission and processing of information and data before arrival of the shipment, as well as electronic or automated systems for risk management and targeting.
3. The Parties shall endeavor to ensure the simultaneous inspection of goods by the relevant domestic authorities at a single time and place when goods enter or leave the Parties' customs territory at a single time and place.

Article 5.9. Risk Management

Page 1 Next page
  • Chapter   ONE Initial Provisions and Definitions 1
  • Article   1.1 Establishment of a Free Trade Area 1
  • Article   1.2 Relation to other Agreements 1
  • Article   1.3 Extent of Obligations 1
  • Article   1.4 General Definitions 1
  • Chapter   TWO National Treatment and Market Access for Goods 1
  • Article   2.1 Scope of Application 1
  • Section   A NATIONAL TREATMENT 1
  • Article   2.2 National Treatment 1
  • Section   B ELIMINATION OF CUSTOMS DUTIES 1
  • Article   2.3 Elimination of Customs Duties 1
  • Section   C SPECIAL REGIMES 1
  • Article   2.4 Waiver of Customs Duties 1
  • Article   2.5 Temporary Admission of Goods 1
  • Article   2.6 Goods Re-entered after Repair or Alteration 1
  • Article   2.7 Duty-free Entry of Commercial Samples of Negligible Value and Printed Advertising Materials 1
  • Article   2.8 Import and Export Restrictions 1
  • Article   2.9 Import Licensing 1
  • Article   2.10 Administrative Fees and Formalities 1
  • Article   2.11 Export Taxes 1
  • Article   2.12 State Trading Enterprises 1
  • Article   2.13 Customs Valuation 1
  • Section   D OTHER MEASURES 1
  • Article   2.14 Agricultural Safeguard Measures 1
  • Article   2.15 Agricultural Export Subsidies 1
  • Article   2.16 Price Band System 1
  • Section   F INSTITUTIONAL PROVISIONS 1
  • Article   2.17 Committee on Trade In Goods 1
  • Section   D DEFINITIONS 1
  • Article   2.18 Definitions 1
  • Chapter   THREE Rules of Origin 1
  • Article   3.1 Originating Goods 1
  • Article   3.2 Wholly Obtained or Produced Goods 1
  • Article   3.3 Regional Value Content (rvc) 1
  • Article   3.4 Intermediate Materials 1
  • Article   3.5 Non-qualifying Operations 1
  • Article   3.6 Accumulation 1
  • Article   3.7 De Minimis 1
  • Article   3.8 Fungible Goods or Materials 1
  • Article   3.9 Sets 1
  • Article   3.10 Accessories, Spare Parts, and Tools 1
  • Article   3.11 Packaging Materials and Containers for Retail Sale 1
  • Article   3.12 Packing Materials and Containers for Shipment 1
  • Article   3.13 Indirect Materials 1
  • Article   3.14 Direct Transport 1
  • Article   3.15 Principle of Territoriality 1
  • Article   3.16 Definitions 1
  • Chapter   FOU Origin Procedures 1
  • Article   4.1 Certificate of Origin 1
  • Article   4.2 Waiver of Certificate of Origin 1
  • Article   4.3 Validity of Certificate of Origin 1
  • Article   4.4 Claims for Preferential Tariff Treatment 1
  • Article   4.5 Post-importation Claims for Preferential Tariff Treatment 1
  • Article   4.6 Record Keeping Requirements 1
  • Article   4.7 Formal Errors 1
  • Article   4.8 Verification 1
  • Article   4.9 Penalties 1
  • Article   4.10 Confidentiality 1
  • Article   4.11 Denial of Preferential Tariff Treatment 1
  • Article   4.12 Modifications 1
  • Article   4.13 Implementation 1
  • Article   4.14 Uniform Regulations 1
  • Article   4.15 Definitions 1
  • Chapter   FIVE Customs Administration and Trade Facilitation 1
  • Section   A TRADE FACILITATION 1
  • Article   5.1 Scope of Application and Objectives 1
  • Article   5.2 Competent Authorities 1
  • Article   5.3 Facilitation 1
  • Article   5.4 Customs Valuation 1
  • Article   5.5 Tariff Classification 1
  • Article   5.6 Review and Appeal 1
  • Article   5.7 Advance Rulings 1
  • Article   5.8 Use of Automated Systems In the Paperless Trading Environment 1
  • Article   5.9 Risk Management 2
  • Article   5.10 Publication and Inquiry Points 2
  • Article   5.11 Express Consignments 2
  • Article   5.12 Release of Goods 2
  • Section   B CUSTOMS COOPERATION 2
  • Article   5.13 Customs Cooperation 2
  • Article   5.14 Implementation of the Customs Cooperation 2
  • Article   5.15 Mutual Administrative Assistance on Customs Matters 2
  • Article   5.16 Form and Substance of Requests for Assistance 2
  • Article   5.17 Execution of Requests 2
  • Article   5.18 Exceptions to the Obligation to Provide Assistance 2
  • Article   5.19 Confidentiality 2
  • Article   5.20 Use of Information 2
  • Article   5.21 Experts and Witnesses 2
  • Article   5.22 Assistance Expenses 2
  • Article   5.23 Review of Customs Procedures 2
  • Article   5.24 Consultations 2
  • Article   5.25 Committee on Customs, Origin, and Trade Facilitation 2
  • Section   C DEFINITIONS 2
  • Article   5.26 Definitions 2
  • Chapter   SIX Sanitary and Phytosanitary Measures 2
  • Article   6.1 Objectives 2
  • Article   6.2 Scope of Application 2
  • Article   6.3 Affirmation of the Sps Agreement 2
  • Article   6.4 Equivalence 2
  • Article   6.5 Risk Assessment 2
  • Article   6.6 Adaptation to Regional Conditions, Including Pest-or Disease-free Areas and Areas of Low Pest or Disease Prevalence 2
  • Article   6.7 Committee on Sanitary and Phytosanitary Matters 2
  • Article   6.8 Dispute Settlement 2
  • Article   6.9 Definitions 2
  • Chapter   SEVEN Technical Barriers to Trade 2
  • Article   7.1 Objective 2
  • Article   7.2 Relation to the Tbt Agreement 2
  • Article   7.3 Scope of Application 2
  • Article   7.4 International Standards 2
  • Article   7.5 Equivalence of Technical Regulations 2
  • Article   7.6 Conformity Assessment Procedures 2
  • Article   7.7 Transparency 2
  • Article   7.8 Technical Cooperation 2
  • Article   7.9 Committee on Technical Barriers to Trade 2
  • Article   7.10 Information Exchange 2
  • Article   7.11 Definition 2
  • Chapter   EIGHT Trade Remedies 2
  • Section   A GLOBAL SAFEGUARD MEASURES 2
  • Article   8.1 Global Safeguard Measures 2
  • Section   B BILATERAL SAFEGUARD MEASURES 2
  • Article   8.2 Imposition of a Bilateral Safeguard Measure 2
  • Article   8.3 Standards for a Bilateral Safeguard Measure 2
  • Article   8.4 Investigation Procedures and Transparency Requirements 2
  • Article   8.5 Provisional Bilateral Safeguard Measures 2
  • Article   8.6 Notification and Consultation 2
  • Article   8.7 Compensation 2
  • Article   8.8 Definitions 2
  • Section   C ANTI-DUMPING AND COUNTERVAILING MEASURES 2
  • Article   8.9 Anti-dumping and Countervailing Measures 2
  • Article   8.10 Definition 2
  • Section   D COOPERATION MECHANISMS ON TRADE REMEDIES 2
  • Article   8.11 Cooperation Mechanisms on Trade Remedies 2
  • Chapter   NINE Investment 2
  • Section   A INVESTMENT 2
  • Article   9.1 Scope of Application 2
  • Article   9.2 Relation to other Chapters 2
  • Article   9.3 National Treatment 2
  • Article   9.4 Most-favored-nation Treatment (2) 2
  • Article   9.5 Minimum Standard of Treatment 2
  • Article   9.6 Senior Management and Boards of Directors 2
  • Article   9.7 Performance Requirements 2
  • Article   9.8 Non-conforming Measures 2
  • Article   9.9 Health, Safety, and Environmental Measures 2
  • Article   9.10 Special Formalities and Information Requirements 2
  • Article   9.11 Compensation for Losses 2
  • Article   9.12 Expropriation 2
  • Article   9.13 Transfers (9) 2
  • Article   9.14 Denial of Benefits 2
  • Article   9.15 Subrogation 3
  • Section   B SETTLEMENT OF DISPUTES BETWEEN AN INVESTOR AND THE HOST PARTY 3
  • Article   9.16 Investor-state Dispute Settlement 3
  • Article   9.17 Term of the Bilateral Investment Treaty 3
  • Section   C Definitions 3
  • Article   9.18 Definitions 3
  • Annex 9A  MOST-FAVORED-NATION TREATMENT 3
  • Annex 9B  EXPROPRIATION 3
  • Annex 9C  TEMPORARY SAFEGUARD MEASURES 3
  • Annex 9D  Public Debt 3
  • Chapter   TEN Cross-border Trade In Services 3
  • Article   10.1 Scope of Application 3
  • Article   10.2 National Treatment 3
  • Article   10.3 Most-favored-nation Treatment 3
  • Article   10.4 Market Access 3
  • Article   10.5 Local Presence 3
  • Article   10.6 Non-conforming Measures 3
  • Article   10.7 Transparency In Developing and Applying Regulations (5) 3
  • Article   10.8 Domestic Regulation 3
  • Article   10.9 Recognition 3
  • Article   10.10 Implementation 3
  • Article   10.11 Denial of Benefits 3
  • Article   10.12 Payments and Transfers (9) 3
  • Article   1013 Definitions 3
  • Chapter   ELEVEN Temporary Entry for Business Persons 4
  • Article   11.1 General Principles 4
  • Article   11.2 General Obligations 4
  • Article   11.3 Relation to other Chapters 4
  • Article   11.4 Grant of Temporary Entry 4
  • Article   11.5 Provision of Information 4
  • Article   11.6 Working Group 4
  • Article   11.7 Dispute Settlement 4
  • Article   11.8 Transparency In Processing of Applications 4
  • Article   11.9 Definitions 4
  • Chapter   TWELVE Financial Services 4
  • Article   12.1 Scope of Application 4
  • Article   12.2 National Treatment 4
  • Article   12.3 Most-favored-nation Treatment 4
  • Article   12.4 Market Access for Financial Institutions 4
  • Article   12.5 Cross-border Trade 4
  • Article   12.6 New Financial Services (3) 4
  • Article   12.7 Treatment of Certain Information 4
  • Article   12.8 Senior Management and Boards of Directors 4
  • Article   12.9 Non-conforming Measures 4
  • Article   12.10 Exceptions 4
  • Article   12.11 Transparency 4
  • Article   12.12 Self-regulatory Organizations (9) 4
  • Article   12.13 Payment and Clearing Systems 4
  • Article   12.14 Recognition 4
  • Article   12.15 Specific Commitments 4
  • Article   12.16 Financial Services Committee 5
  • Article   12.17 Consultations 5
  • Article   1218 Dispute Settlement 5
  • Article   12.19 Investment Disputes In Financial Services 5
  • Article   12.20 Definitions 5
  • Chapter   THIRTEEN Telecommunications 5
  • Article   13.1 Scope of Application 5
  • Article   13.2 Relation to other Chapters 5
  • Section   A ACCESS TO AND USE OF PUBLIC TELECOMMUNICATIONS NETWORKS AND SERVICES 5
  • Article   13.3 Access to and Use of Public Telecommunications Networks and Services (2) 5
  • Section   B ADDITIONAL OBLIGATIONS RELATED TO MAJOR SUPPLIERS OF PUBLIC TELECOMMUNICATIONS SERVICES 5
  • Article   13.4 Treatment by Major Suppliers 5
  • Article   13.5 Competitive Safeguards 5
  • Article   13.6 Interconnection 5
  • Section   C OTHER MEASURES 5
  • Article   13.7 Independent Regulatory Bodies 5
  • Article   13.8 Universal Service 5
  • Article   13.9 Licensing Process 5
  • Article   13.10 Allocation and Use of Scarce Resources 6
  • Article   13.11 Resolution of Telecommunications Disputes (3)  6
  • Article   13.12 Transparency 6
  • Section   D DEFINITIONS 6
  • Article   13.13 Definitions 6
  • Chapter   FOURTEEN Electronic Commerce 6
  • Article   14.1 General Provisions 6
  • Article   14.2 Relation to other Chapters 6
  • Article   14.3 Electronic Supply of Services 6
  • Article   14.4 Customs Duties 6
  • Article   14.5 Consumer Protection 6
  • Article   14.6 Paperless Trading 6
  • Article   14.7 Protection of Personal Information 6
  • Article   14.8 Electronic Authentication and Digital Certificates 6
  • Article   14.9 Cooperation 6
  • Article   14.10 Definitions 6
  • Chapter   FIFTEEN Competition Policy 6
  • Article   15.1 Objectives 6
  • Article   15.2 Implementation 6
  • Article   15.3 Cooperation 6
  • Article   15.4 Notifications 6
  • Article   15.5 Consultations 6
  • Article   15.6 Confidentiality 6
  • Article   15.7 Technical Assistance 6
  • Article   15.8 Cross-border Consumer Protection 6
  • Article   15.9 State Enterprises and Designated Monopolies 6
  • Article   15.10 Dispute Settlement 6
  • Article   15.11 Definitions 6
  • Chapter   SIXTEEN Government Procurement 6
  • Article   16.1 Scope of Application 6
  • Article   16.2 Exceptions to the Chapter 6
  • Article   16.3 General Principles 6
  • Article   16.4 Publication of Procurement Information 6
  • Article   16.5 Publication of Notices 6
  • Article   16.6 Conditions for Participation 6
  • Article   16.7 Information on Intended Procurements 6
  • Article   16.8 Time-periods 6
  • Article   16.9 Tendering Procedures 6
  • Article   16.10 Electronic Auctions 6
  • Article   16.11 Opening of Tenders and Awarding of Contracts 6
  • Article   16.12 Transparency In Procurement Information 6
  • Article   16.13 Disclosure of Information 6
  • Article   16.14 Domestic Review Procedures for Supplier Challenges 6
  • Article   16.15 Modifications and Rectifications to Coverage 6
  • Article   16.16 Further Negotiations 6
  • Article   16.17 Small and Medium-sized Enterprises Participation (1) 6
  • Article   16.18 Cooperation 6
  • Article   16.19 Committee on Procurement 7
  • Article   16.20 Definitions 7
  • Chapter   SEVENTEEN Intellectual Property Rights 7
  • Article   17.1 Objectives 7
  • Article   17.2 Affirmation of International Agreements 7
  • Article   17.3 More Extensive Protection 7
  • Article   17.4 General Principles 7
  • Article   17.5 Genetic Resources and Traditional Knowledge 7
  • Article   17.6 Recognition and Protection of Geographical Indications 7
  • Article   17.7 Copyright and Related Rights 7
  • Article   17.8 Enforcement 7
  • Article   17.9 Special Requirements Related to Border Measures 7
  • Article   17.10 Cooperation and Technology Transfer 7
  • Chapter   EIGHTEEN Labor 7
  • Article   18.1 Fundamental Labor Rights 7
  • Article   18.2 Application and Enforcement of Labor Law 7
  • Article   18.3 Procedure Guarantee and Public Awareness 7
  • Article   18.4 Institutional Mechanism 7
  • Article   18.5 Labor Cooperation 7
  • Article   18.6 Labor Consultations 7
  • Article   18.7 Dispute Settlement 7
  • Chapter   NINETEEN Environment 7
  • Article   19.1 General Provisions 7
  • Article   19.2 Levels of Protection 7
  • Article   19.3 Multilateral Environmental Agreements 7
  • Article   19.4 Trade Favoring Environment 7
  • Article   19.5 Application and Enforcement of Environmental Law 7
  • Article   19.6 Biological Diversity 7
  • Article   19.7 Environment and Enterprise 7
  • Article   19.8 Climate Change 7
  • Article   19.9 Technology Favoring Environment 7
  • Article   19.10 Institutional Mechanism 7
  • Article   19.11 Environmental Cooperation 7
  • Article   19.12 Environmental Consultations 7
  • Article   19.13 Review of Environment Impacts 7
  • Article   19.14 Dispute Settlement 7
  • Chapter   TWENTY Cooperation 7
  • Article   20.1 Objective 7
  • Article   20.2 General Provisions 7
  • Article   20.3 Economic Cooperation 7
  • Article   20.4 Small and Medium-sized Enterprises Cooperation (1) 7
  • Article   20.5 Fisheries and Aquaculture Cooperation 7
  • Article   20.6 Tourism Cooperation 7
  • Article   20.7 Forestry Cooperation 7
  • Article   20.8 Energy and Mineral Resources Cooperation 7
  • Article   20.9 Science and Technology Cooperation 7
  • Article   20.10 Information and Communications Technology Cooperation 7
  • Article   20.11 Maritime Transport Cooperation 7
  • Article   20.12 Cultural Cooperation 7
  • Article   20.13 Agricultural Cooperation 7
  • Article   20.14 Committee on Cooperation and Contact Points 7
  • Article   20.15 Dispute Settlement 7
  • Chapter   TWENTYONE- Transparency 7
  • Article   21.1 Publication 7
  • Article   21.2 Notification and Provision of Information 7
  • Article   21.3 Administrative Proceedings 7
  • Article   21.4 Review and Appeal 7
  • Article   21.5 Definition 7
  • Chapter   TWENTY-TWO Administration of the Agreement 7
  • Article   22.1 Joint Commission 7
  • Article   22.2 Agreement Coordinators -contact Points 7
  • Chapter   TWENTY-THREE Dispute Settlement 7
  • Article   23.1 Cooperation 7
  • Article   23.2 Scope of Application 7
  • Article   23.3 Choice of Forum 7
  • Article   23.4 Consultations 7
  • Article   23.5 Intervention of the Joint Commission 7
  • Article   23.6 Request for a Panel 7
  • Article   23.7 Qualifications of Panelists 7
  • Article   23.8 Panel Selection 7
  • Article   23.9 Role of the Panel 7
  • Article   23.10 Model Rules of Procedure 7
  • Article   23.11 Role of Experts 7
  • Article   23.12 Consolidation of Proceedings 7
  • Article   23.13 Report of the Panel 7
  • Article   23.14 Request for Clarification of the Report 8
  • Article   23.15 Suspension and Termination of Procedure 8
  • Article   23.16 Implementation of the Report 8
  • Article   23.17 Non-implementation and Compensation 8
  • Article   23.18 Examination of Implementation 8
  • Article   23.19 Suspension of Benefits 8
  • Article   23.20 Examination of the Level of Suspension of Benefits 8
  • Chapter   TWENTY-FOUR Exceptions 8
  • Article   24.1 General Exceptions 8
  • Article   24.2 Essential Security 8
  • Article   24.3 Disclosure of Information 8
  • Article   24.4 Taxation 8
  • Article   24.5 Balance of Payments Exceptions 8
  • Chapter   TWENTY-FIVE Final Provisions 8
  • Article   25.1 Annexes, Appendices, and Footnotes 8
  • Article   25.2 Entry Into Force 8
  • Article   25.3 Amendments 8
  • Article   25.4 Termination 8
  • Article   25.5 Authentic Texts 8
  • Article   Article 8