(b) In the European Union, the services of the European Commission responsible for customs matters and the customs administrations and any other authorities responsible in the Member States of the European Union for the application and enforcement of customs legislation.
Article 4.3. Customs Cooperation
1. The Parties shall cooperate on customs matters between their respective authorities in order to ensure that the objectives set out in Article 4.1 are attained.
2. The Parties shall develop cooperation, inter alia, by:
(a) exchanging information concerning customs laws and regulations, its implementation, and customs procedures; particularly in the following areas:
- simplification and modernisation of customs procedures,
- enforcement of intellectual property rights by the customs authorities, - facilitation of transit movements and transhipment,
- relations with the business community,
- supply chain security and risk management.
(b) working together on the customs-related aspects of securing and facilitating the international trade supply chain in accordance with the Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework) of the World Customs Organization (WCO);
(c) considering developing joint initiatives relating to import, export and other customs procedures including the exchange of best practices and technical assistance, as well as towards ensuring an effective service to the business community. Cooperation may include exchanges on customs laboratories, the training of customs officers and on new technologies for customs controls and procedures;
(d) strengthening their cooperation in the field of customs in international organisations such as the World Trade Organization (WTO) and the World Customs Organization (WCO);
(e) establishing, where relevant and appropriate, the mutual recognition of their Authorized Economic Operator programmes including equivalent trade facilitation measures;
(f) carrying out exchanges on risk management techniques, risk standards and security controls, in order to establish, to the extent practicable, minimum standards for risk management techniques and related requirements and programmes;
(g) endeavouring to harmonize their data requirements for import, export and other customs procedures by implementing common standards and data elements in accordance with the World Customs Organization (WCO) Data Model;
(h) sharing their respective experiences in developing and deploying their single window systems, and, where appropriate, develop common sets of data elements for those systems;
(i) maintaining a dialogue between their respective policy experts to promote the utility, efficiency, and applicability of advance rulings for authorities and traders; and
(j) exchanging, where relevant and appropriate, through a structured and recurrent communication between the customs authorities of the Parties, certain categories of customs- related information for specific purposes, namely improving risk management and the effectiveness of customs controls, targeting goods at risk in terms of revenue collections or safety and security, and facilitating legitimate trade; such exchange shall be without prejudice to exchanges of information that may take place between the Parties in accordance with the Protocol on mutual administrative assistance in customs matters.
3. Any exchange of information between the Parties under this Chapter shall be mutatis mutandis subject to the confidentiality of information and personal data protection requirements set out in Article 12 of the Protocol on mutual administrative assistance in customs matters, as well as any confidentiality and privacy requirements set out in the legislation of the Parties.
Article 4.4. Mutual Administrative Assistance
The Parties shall provide each other with mutual administrative assistance in customs matters in accordance with the provisions of the Protocol on mutual administrative assistance in customs matters.
Article 4.5. Customs Laws and Procedures
1. Each Party shall ensure that its customs provisions and procedures shall be based upon:
(a) international instruments and standards in the area of customs and trade, including the International Convention on the Harmonized Commodity Description and Coding System, as well as the Framework of Standards to Secure and Facilitate Global Trade and the Customs Data Model of the WCO, and if applicable, the substantive elements of the Revised Kyoto Convention on the Simplification and Harmonisation of Customs Procedures;
(b) the protection and facilitation of legitimate trade through effective enforcement and compliance of legislative requirements; and
(c) laws and regulations that are proportionate and non-discriminatory, avoids unnecessary burdens on economic operators, provides for further facilitation for operators with high levels of compliance, including favourable treatment with respect to customs controls prior to the release of goods, and ensures safeguards against fraud and illicit or damageable activities.
2. In order to improve working methods, as well as to ensure non-discrimination, transparency, efficiency, integrity and accountability of operations, the Parties shall:
(a) simplify and review requirements and formalities wherever possible with a view to the rapid release and clearance of goods;
(b) work towards the further simplification and standardisation of data and documentation required by customs and other agencies in order to reduce the time and costs thereof for traders or operators, including small and medium-sized enterprises; and
(c) ensure that the highest standards of integrity be maintained, through the application of measures reflecting the principles of the relevant international conventions and instruments in this field.
Article 4.6. Release of Goods
Each Party shall ensure that its customs authorities, border agencies or other competent authorities:
(a) provide for the prompt release of goods within a period no greater than that required to ensure compliance with its customs and other trade-related laws and formalities;
(b) allow for advance electronic submission and processing of documentation and any other required information prior to the arrival of the goods;
(c) allow for the release of goods prior to the final determination of customs duties, taxes, fees and charges, subject to the provision of a guarantee, if required by its laws and regulations, in order to secure their final payment; and
(d) give appropriate priority to perishable goods when scheduling and performing any examinations that may be required.
Article 4.7. Simplified Customs Procedures
Each Party shall adopt or maintain measures allowing traders or operators fulfilling criteria specified in its laws and regulations to benefit from further simplification of customs procedures. Such measures may include customs declaration containing a reduced set of data or supporting documents, or periodical customs declaration for the determination and payment of customs duties and taxes covering multiple imports within a given period, after the release of those imported goods or other procedures that provide for the expedited release of certain shipments.
Article 4.8. Authorised Economic Operator - AEO
1. Each Party shall establish or maintain a trade facilitation partnership programme for operators who meet specified criteria, hereinafter, called authorised operators.
2. The specified criteria to qualify as authorised operators shall be related to compliance, or the risk of non-compliance, with requirements specified in the Partiesâ laws, regulations or procedures. The specified criteria, which shall be published, may include:
(a) the absence of any serious infringement or repeated infringements of customs legislation and taxation rules, including no record of serious criminal offences relating to the economic activity of the applicant;
(b) the demonstration by the applicant of a high level of control of his or her operations and of the flow of goods, by means of a system of managing commercial and, where appropriate, transport records, which allows appropriate customs controls;
(c) financial solvency, which shall be deemed to be proven where the applicant has good financial standing, which enables him or her to fulfil his or her commitments, with due regard to the characteristics of the type of business activity concerned;
(d) proven competences or professional qualifications directly related to the activity carried out; and
(e) appropriate security and safety standards.
3. The specified criteria to qualify as an authorised operator shall not be designed or applied so as to afford or create arbitrary or unjustifiable discrimination between operators where the same conditions prevail and shall allow the participation of small and medium- sized enterprises.
4. The trade facilitation partnership programme shall include the following benefits:
(a) low documentary and data requirements, as appropriate; (b) lower rate of physical inspections or expedited examinations, as appropriate; (c) simplified release procedures and rapid release time, as appropriate;
(d) use of guarantees, including where applicable comprehensive guarantees or reduced guarantees;
(e) control of the goods at the premises of the authorized economic operator or another place authorized by customs.
5. The trade facilitation partnership programme may also include additional benefits, such as:
(a) deferred payment of duties, taxes, fees and charges;
(b) a single customs declaration for all imports or exports in a given period; and
(c) availability of a dedicated contact point to provide assistance in customs matters.
Article 4.9. Data and Documentation
1. Each Party shall ensure that import, export and transit formalities, data and documentation requirements:
(a) are adopted and applied with a view to a rapid release of goods, provided the conditions for the release are fulfilled;
(b) are adopted and applied in a manner that aims to reduce the time and cost of compliance for traders and operators;
(c) are the least trade-restrictive measure chosen, where two or more alternative measures are reasonably available for fulfilling the policy objective or objectives in question; and
(d) are not maintained, including parts thereof, if no longer required.
2. Each Party shall apply common customs procedures and uniform customs documents for release of goods throughout its customs territory.
Article 4.10. Use of Information Technology and Electronic Payment
1. Each Party shall use information technologies that expedite procedures for the release of goods in order to facilitate trade between the Parties.
2. Each Party shall:
(a) make available by electronic means a customs declaration that is required for the import, transit or export of goods;
(b) allow a customs declaration to be submitted in electronic format;
(c) establish a means of providing for the electronic exchange of customs information with its trading community;
(d) promote the electronic exchange of data between their respective traders and customs authorities, as well as other related agencies; and
(e) use electronic risk management systems for assessment and targeting that enable its customs authorities to focus their inspections on high-risk goods and that facilitate the release and movement of low-risk goods.
3. Each Party shall adopt or maintain procedures allowing the option of electronic payment for duties, taxes, fees and charges collected by customs incurred upon importation and exportation.
Article 4.11. Risk Management
1. Each Party shall adopt or maintain a risk management system for customs control.
2. Each Party shall design and apply risk management in a manner as to avoid arbitrary or unjustifiable discrimination, or disguised restrictions to international trade.
3. Each Party shall concentrate customs control and other relevant border controls on high-risk consignments and expedite the release of low-risk consignments. Each Party may also select, on a random basis, consignments for such controls as part of its risk management.
4. Each Party shall base risk management on assessment of risk through appropriate selectivity criteria.
Article 4.12. Post-clearance Audit
1. With a view to expediting the release of goods, each Party shall adopt or maintain post-clearance audit to ensure compliance with customs and other related laws and regulations.
2. Each Party shall conduct post-clearance audits in a risk-based manner.
3. Each Party shall conduct post-clearance audits in a transparent manner. Where an audit is performed and conclusive results have been achieved the Party shall, without delay, notify the person whose record is audited of the results, the person's rights and obligations and the reasons for the results.
4. The Parties acknowledge that the information obtained in a post-clearance audit may be used in further administrative or judicial proceedings.
5. The Parties shall, wherever practicable, use the result of post-clearance audit in applying risk management.
Article 4.13. Transparency
1. The Parties recognise the importance of timely consultations with trade representatives on legislative proposals and general procedures related to customs and trade matters. To that end, each Party shall provide for appropriate consultations between administrations and the business community.
2. Each Party shall ensure that their respective customs and customs-related requirements and procedures continue to meet the needs of the business community, follow best practices, and remain the least trade restrictive possible.
3. Each Party shall provide for appropriate regular consultations between border agencies and traders or other stakeholders within its territory.
4. Each Party shall publish promptly in a non-discriminatory and accessible manner, including online, and prior to their application, new laws and regulations related to customs and trade facilitation matters, as well as amendments to, and interpretations of, those laws and regulations. Such laws and regulations, as well as their amendments and interpretations, shall include those relating to:
(a) importation, exportation and transit procedures (including port, airport, and other entry-point procedures) and required forms and documents;
(b) applied rates of duties and taxes of any kind imposed on or in connection with importation or exportation;
(c) fees and charges imposed by or for governmental agencies on or in connection with importation, exportation or transit;
(d) rules for the classification or valuation of products for customs purposes;
(e) laws, regulations and administrative rulings of general application relating to rules of origin;
(f) import, export or transit restrictions or prohibitions;
(g) penalty provisions against breaches of import, export or transit formalities;
(h) agreements or parts thereof with any country or countries relating to importation, exportation or transit;
(i) procedures relating to the administration of tariff quotas;
(j) hours of operation and operating procedures for customs offices at ports and border crossing points;
(k) points of contact for information enquiries; and
(l) other relevant notices of an administrative nature in relation to the above.
4. Each Party shall ensure there is a reasonable time period between the publication! of new or amended laws, regulations and procedures and fees or charges and their entry into force.
5. Each Party shall establish or maintain one or more enquiry points to answer reasonable enquiries from governments, traders and other interested parties on customs and other trade-related matters. The enquiry points shall answer enquiries within a reasonable time period set by each Party, which may vary depending on the nature or complexity of the request. A Party shall not require the payment of a fee for answering enquiries or providing required forms and documents.
Article 4.14. Advance Rulings
1. An advance ruling is a written decision provided to an applicant prior to the importation of a good covered by the application that sets forth the treatment that the Party shall provide to the good at the time of importation with regard to:
(a) the good's tariff classification;
(b) the origin of the good; and
(c) any other matters that the Parties may agree.
2. Each Party shall issue, through its customs authorities, an advance ruling that sets forth the treatment to be provided to the goods concerned. That ruling shall be issued in a reasonable, time bound manner to the applicant that has submitted a written request, including in electronic format, containing all necessary information in accordance with the laws and regulations of the issuing Party.
3. The advance ruling shall be valid for at least a three-year period of time after its issuance unless the law, facts or circumstances supporting the original advance ruling have changed.
4. A Party may decline to issue an advance ruling if the facts and circumstances which form the basis of the advance ruling are under administrative or judicial review or if the application does not relate to any intended use of the advance ruling. If a Party declines to issue an advance ruling, it shall promptly notify the applicant in writing, setting out the relevant facts and the basis for its decision.
5. Each Party shall publish, at least:
(a) the requirements for the application for an advance ruling, including the information to be provided and the format;
(b) the time period by which it will issue an advance ruling; and
1 For greater clarity, publication refers to making laws and regulations publicly available
(c) the length of time for which the advance ruling is valid.
6. Where a Party revokes or modifies or invalidates an advance ruling, it shall provide written notice to the applicant setting out the relevant facts and the basis for its decision. Where the Party revokes or modifies or invalidates an advance ruling with retroactive effect, it may only do so where the ruling was based on incomplete, incorrect, false or misleading information provided by the applicant.
7. An advance ruling issued by a Party shall be binding on that Party in respect of the applicant that sought it. The advance ruling shall also be binding on the applicant.
8. Each Party shall provide, upon written request of an applicant, a review of the advance ruling or of the decision to revoke, modify or invalidate it.
9. Subject to confidentiality requirements in its laws and regulations, each Party shall make publicly available, including on the internet, the substantive elements of its advance rulings.
Article 4.15. Transit and Transhipment 1. Each Party Shall Ensure the Facilitation and Effective Control of Transhipment Operations and Transit Movements Through Their Respective Territories. 2. Each Party Shall Promote and Implement Regional Transit Arrangements with a View to Facilitating Trade. 3. Each Party Shall Ensure Cooperation and Coordination between All Concernedauthorities and Agencies In Their Respective Territories to Facilitate Traffic In Transit.
4. Each Party shall allow goods intended for import to be moved within its territory under customs control from a customs office of entry to another customs office in its territory from where the goods would be released or cleared, provided all regulatory requirements are met.
Article 4.16. Customs Brokers
No Party shall introduce the mandatory use of customs brokers as a requirement for traders to fulfil their obligations with respect to the importation, exportation and transit of goods. Each Party shall publish its measures on the use of customs brokers. The Parties shall apply transparent, non-discriminatory and proportionate rules if and when licensing customs brokers.
Article 4.17. Pre-shipment Inspections
The Parties shall not require the mandatory use of pre-shipment inspections as defined in the WTO Agreement on Pre-shipment Inspection, or any other inspection activity performed at destination, before customs clearance, by private companies.
Article 4.18. Appeals
1. Each Party shall provide effective, prompt, non-discriminatory and easily accessible procedures to guarantee the right of appeal against the administrative actions, rulings and decisions of customs or other competent authorities affecting import or export of goods or goods in transit.
2. Appeal procedures may include administrative review by the supervising authority and judicial review of decisions taken at the administrative level according to the legislation of the Parties.
3. Any person who has applied to the customs authorities for a decision and has not obtained a decision on that application within the relevant time-limits shall also be entitled to exercise the right of appeal.
4. Each Party shall provide a person to whom it issues an administrative decision with the reasons for the administrative decision, so as to enable such a person to have recourse to appeal procedures where necessary.
Article 4. Penalties
1. Each Party shall ensure that its respective customs laws and regulations provide that any penalties imposed for breaches of customs regulations or procedural requirements be proportionate and non-discriminatory.
2. Penalties for a breach of a customs law, regulation, or procedural requirement are imposed only on the person(s) responsible for the breach under its laws.
3. Penalties imposed shall depend on the facts and circumstances of the case and shall be commensurate with the degree and severity of the breach. Each Party shall avoid incentives for the assessment or collection of a penalty, or conflicts of interest in the assessment and collection of penalties.
4. In case of voluntary prior disclosure to a customs authority of the circumstances of a breach of a customs law, regulation, or procedural requirement, each Party is encouraged to consider this as a potential mitigating factor when establishing a penalty.
5. When a penalty is imposed for a breach of a customs laws, regulations, or procedural requirements, an explanation in writing is provided to the person(s) upon whom the penalty is imposed specifying the nature of the breach and the applicable law, regulation or procedure under which the amount or range of penalty for the breach has been prescribed.
Article 4. Customs Committee
1. The Parties hereby establish a Special Committee on Customs, Trade Facilitation and Rules of Origin, composed of representatives of the Parties. The Committee shall meet on a date and with an agenda agreed in advance by the Parties. The office of chairperson of the Committee shall be held alternately by each of the Parties and rotate annually. The Committee shall report to the [xx Committee].
2. The Sub-Committee shall ensure the proper functioning of this Chapter, the border enforcement of Intellectual Property Rights by competent authorities in sub-section xx of the IPR chapter, the {Protocol xx on Rules of Origin], the Protocol on mutual administrative assistance in customs matters and any additional customs-related provisions agreed between the Parties, and examine all issues arising from their application.
3. The functions of the Sub-Committee shall include:
(a) monitoring the implementation and administration of this Section and of the [Annex/Protocol] on rules of origin;
(b) providing a forum to consult and discuss all issues concerning customs, including in particular customs procedures, customs valuation, tariff regimes, customs nomenclature, customs cooperation and mutual administrative assistance in customs matters;
(c) providing a forum to consult and discuss issues relating to rules of origin and administrative cooperation, and intellectual property rights border measures;
(d) enhancing cooperation on the development, application and enforcement of customs procedures, mutual administrative assistance in customs matters, rules of origin and administrative cooperation.
[4. The Sub-Committee shall examine the need for, and take, decisions, opinions, proposals or recommendations on all issues arising from their implementation. It shall have the power to adopt decisions on mutual recognition of risk management techniques, risk standards, security controls and trade partnership programmes, including aspects such as data transmission and mutually agreed benefits.]
5. The Parties may agree to hold ad hoc meetings for customs cooperation or for rules of origin or mutual administrative assistance.
Article 4.21. Temporary Admission
1. For the purposes of this Article, the term "temporary admission" means the customs procedure under which certain goods (including means of transport) can be brought into a customs territory conditionally relieved from payment of import duties and taxes and without application of import prohibitions or restrictions of economic character. Such goods must be imported for a specific purpose and must be intended for re-exportation within a specified period and without having undergone any change except normal depreciation due to the use made of them.
2. Each Party shall grant temporary admission, with total conditional relief from import duties and taxes and without application of import restrictions or prohibitions of economic characterâ, as provided for in its laws and regulations, to the following goods:
(a) Goods for display or use at exhibitions, fairs, meetings or similar events (goods intended for display or demonstration at an event; goods intended for use in connection with the display of foreign products at an event; equipment including interpretation equipment, sound and image recording apparatus and films of an educational, scientific or cultural character intended for use at international meetings, conferences or congresses); goods obtained at such events from goods placed under temporarily admission. Each Party may require for a governmental authorization to be issued before the event takes place or a guarantee or deposit to be issued;
(b) Professional equipment (equipment for the press or for sound or television broadcasting which is necessary for representatives of the press or of broadcasting or television organizations visiting the territory of another country for purposes of reporting or in order to transmit or record material for specified programmes; cinematographic equipment necessary for a person visiting the territory of another country in order to make a specified film or films; any other equipment necessary for the exercise of the calling, trade or profession of a person visiting the territory of another country to perform a specified task, insofar as it is not to be used for the industrial manufacture or packaging of goods or (except in the case of hand tools) for the exploitation of natural resources, for the construction, repair or maintenance of buildings or for earth moving and like projects; ancillary apparatus for the equipment mentioned above, and accessories therefor); component parts imported for repair of professional equipment temporarily admitted;