Article XI of the GATT 1994 and its notes and supplementary provisions are incorporated into and made part of this agreement, mutatis mutandis. Accordingly, no Party shall adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on 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, including its notes and supplementary provisions.
Article 2.12. Origin Marking
Where Chile applies mandatory country of origin marking requirements to products of the Union, the Association Committee may decide that products marked "Made in EU", or bearing a similar marking in the local language, fulfill such requirements upon importation into Chile. This article does not affect each party's right to specify the type of products for which origin marking requirements are mandatory. Chapter 3 (Rules of origin and origin procedures) does not apply to this Article.
Article 2.13. Import Licensing Procedures
1. Each Party shall ensure that all import licensing procedures applicable to trade in goods between the Parties are neutral in application, and are administered in a fair, equitable, non-discriminatory and transparent manner.
2. A Party shall only adopt or maintain licensing procedures as a condition for importation into its territory from the territory of the other Party, if other appropriate procedures to achieve an administrative purpose are not reasonably available.
3. A Party shall not adopt or maintain any non-automatic import licensing procedure, as a condition for importation into its territory from the territory of the other Party, unless it is necessary to implement a measure that is consistent with this Agreement. A Party adopting such non-automatic import licensing procedure shall indicate clearly to the other Party the measure being implemented through that procedure.
4. Each Party shall adopt and administer any import licensing procedures in accordance with Articles 1 to 3 of the WTO Agreement on Import Licensing Procedures. To this end, Articles 1 to 3 of the Agreement on Import Licensing Procedures are incorporated into and made part of this Agreement, mutatis mutandis.
5. A Party that institutes licensing procedures, or changes to existing licensing procedures, shall notify the other Party of such within 60 days of publication. The notification shall include the information specified in paragraph 3 above and Article 5(2) of the Agreement on Import Licensing Procedures. A Party shall be deemed to be in compliance with this provision if it has notified the relevant import licensing procedure, or any modifications thereof, to the Committee on Import Licensing provided for in Article 4 of the Import Licensing Agreement, including the information specified in Article 5(2) of that Agreement.
6. Upon request of a Party, the other Party shall promptly provide any relevant information, including the information specified in Article 5(2) of the Agreement on Import Licensing Procedures, regarding any import licensing procedure that it intends to adopt, has adopted or maintains, or changes to existing licensing procedures.
Article 2.14. Export Licensing Procedures
1. Each Party shall publish any new export licensing procedure, or any modification to an existing export licensing procedure, in such a manner as to enable governments, traders and other interested parties to become acquainted with them. Such publication shall take place, whenever practicable, 30 days before the procedure or modification takes effect, and in all events no later than the date such procedure or modification takes effect.
2. The publication of export licensing procedures shall include the following information:
(a) the texts of its export licensing procedures, or of any modifications it makes to those procedures;
(b) the goods subject to each licensing procedure;
(c) for each procedure, a description of the process for applying for a license and any criteria an applicant must meet to be eligible to apply for a license, such as possessing an activity license, establishing or maintaining an investment, or operating through a particular form of establishment in a Party's territory;
(d) a contact point or points from which interested persons can obtain further information on the conditions for obtaining an export license;
(e) the administrative body or bodies to which an application or other relevant documentation should be submitted;
(f) a description of any measure or measures that the export licensing procedure is designed to implement;
(g) the period during which each export licensing procedure will be in effect, unless the procedure will remain in effect until withdrawn or revised in a new publication;
(h) if the Party intends to use a licensing procedure to administer an export quota, the overall quantity and, if applicable, the value of the quota and the opening and closing dates of the quota; and
(i) any exemptions or exceptions that replace the requirement to obtain an export license, how to request or use those exemptions or exceptions, and the criteria for granting them.
3. Within 30 days after the date of entry into force of this Agreement, each Party shall notify the other Party of its existing export licensing procedures. A Party that institutes new export licensing procedures, or changes to existing licensing procedures, shall notify the other Party of such within 60 days of publication. The notification shall include the reference to the source(s) where the information required in paragraph 2 is published and include, where appropriate, the address of the relevant government Internet website(s).
4. For greater certainty, nothing in this Article requires a Party to grant an export license, or prevents a Party from implementing its obligations or commitments under United Nations Security Council Resolutions, as well as under multilateral non-proliferation regimes and export control arrangements.
Article 2.15. Customs Valuation
Each Party shall determine the customs value of goods of the other Party imported into their territory in accordance with Article VII of the GATT 1994 and the Customs Valuation Agreement. To this end, Article VII of the GATT 1994, including its Notes and Supplementary Provisions, and Articles 1 to 17 of the Customs Valuation Agreement, including its Interpretative Notes, are incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.16. Preference Utilisation
1. For the purpose of monitoring the functioning of the Agreement and calculating preference utilisation rates, the Parties shall annually exchange import statistics for a period starting one year after the entry into force of this Agreement until 10 years after the tariff elimination is completed for all goods according to the Schedules in Annex [X-x] (Tariff Elimination Schedules). Unless the [Trade Committee] decides otherwise, this period shall be automatically extended for five years, and thereafter this Committee may decide to subsequently extend it.
2. The exchange of import statistics shall cover data pertaining to the most recent year available, including value and, where applicable, volume, at the tariff line level for imports of goods of the other Party benefitting from preferential duty treatment under this Agreement and those that received non-preferential treatment.
Article 2.17. Specific Measures Concerning the Management of Preferential Treatment
1. The Parties shall co-operate in preventing, detecting and combating breaches in customs legislation related to the preferential treatment granted under this [Title/Chapter], in accordance with their obligations under the Chapter on Rules of Origin and the Protocol on Mutual Administrative Assistance in Customs Matters.
2. A Party may, in accordance with the procedure laid down in paragraph 3, temporarily suspend the relevant preferential treatment of the product(s) concerned when that Party has made a finding, based on objective, compelling and verifiable information, that large-scale systematic breaches in customs legislation in order to obtain the preferential treatment granted under this [Title/Chapter] have been committed, and:
(a) asystematic lack or inadequacy of action by the other Party in verifying the originating status of products and the fulfilment of the other requirements of the Protocol on Mutual Administrative Assistance in Customs Matters, when identifying or preventing contravention of the rules of origin;
(b) asystematic refusal or undue delay by the other Party to carry out subsequent verification of the proof of origin at the request of the other Party, and to communicate its results in time; or
(c) a systematic refusal or failure by the other Party to cooperate and assist in compliance with its obligations under the MAA protocol in relation with the preferential tariff treatment.
3. The Party which has made a finding referred to in paragraph 2 shall, without undue delay, notify the [Trade Committee] thereof and enter into consultations with the other Party within the [Trade Committee] with a view to reaching a solution acceptable to both Parties.
Where the Parties fail to agree on a mutually acceptable solution within three months after the date of notification, the Party, which has made the finding may decide to suspend temporarily the relevant preferential treatment of the product(s) concerned. A temporary suspension shall be notified to the Committee without delay.
The temporary suspensions shall apply only for a period necessary to protect the financial interests of the Party concerned, and not for longer than six months. Where the conditions that gave rise to the initial suspension persist at the expiry of the six- month period, the Party concerned may decide to renew the suspension. Any suspension shall be subject to periodic consultations within the [Trade Committee].
4. Each Party shall publish, in accordance with its internal procedures, notices to importers about any notification and decision concerning temporary suspensions referred to in paragraph 3.
Article 2.18. Sub-Committee on Trade In Goods
The Sub--Committee on Trade in Goods established by Article X.4 (1) (Sub-Committees of the Trade Title of this Agreement) shall:
(a) monitor the implementation and administration of this Chapter and its Annexes;
(b) promote trade in goods between the Parties, including through consultations on improving market access tariff treatment under Article 2.5(4) and other issues, as appropriate;
(c) provide a forum to discuss and resolve any issues related to this Chapter;
(d) promptly address 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 Trade Committee for its consideration;
(e) recommend to the Trade Committee any modification of or addition to this Chapter;
(f) coordinate the data exchange for preference utilisation or any other information exchange on trade in goods between the Parties that it may decide;
(g) review any future amendments of the Harmonized System to ensure that each Party's obligations under this Agreement are not altered, and consulting to resolve any related conflict;
(h) Perform the functions set out in Article [Role of the Trade in Goods Sub- Committee] of the Energy and Raw Materials Chapter
(i) perform any other functions that the Trade Committee may assign to it.
Chapter 3. RULES OF ORIGIN AND ORIGIN PROCEDURES
Section A. Rules of Origin
Article 3.1. Definitions
For the purposes of this [Chapter]:
(a) "classified" refers to the classification of a product or material under a particular chapter, heading, or sub-heading of the Harmonized System;
(b) "consignment" means products which are either sent simultaneously from one exporter to one consignee or covered by a single transport document covering their shipment from the exporter to the consignee or, in the absence of such a document, by a single invoice;
(c) "customs authority" means:
- in Chile, the National Customs Service; and
- 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;
(d) "exporter" means a person, located in a Party, who, in accordance with the requirements laid down in the laws and regulations of the Party, exports or produces the originating product and makes out a statement on origin;
(e) "identical products" means products which correspond in every respect to those described in the product description. The product description on the commercial document used for making out a statement on origin for multiple shipments must be precise enough to clearly identify that product but also the identical products to be subsequently imported based on that statement;
(f) "importer" means a person who imports the originating product and claims preferential tariff treatment for it;
(g) "material" means any substance used in the production of a product, including any ingredients, raw materials, components or parts;
(h) "product" means the product resulting from the production, even if it is intended for later use as a material in the production of another product;
(i) "production" means any kind of working or processing including assembly.
Article 3.2. General Requirements
1. For the purpose of applying the preferential tariff treatment by a Party to an originating good of the other Party in accordance with this Agreement, provided that the products satisfy all other applicable requirements of this [Chapter], the following products shall be considered as originating in a Party:
(a) products wholly obtained in that Party as provided for in Article 3.4 [Wholly obtained products];
(b) products produced exclusively from materials originating in that Party; or
(c) products produced using non-originating materials provided they satisfy the requirements set out in Annex II (Product-Specific Rules of Origin).
2. If a product has acquired originating status, the non-originating materials used in the production of that product shall not be considered non-originating when that product is incorporated as a material in another product.
3. The acquisition of originating status shall be fulfilled without interruption in the territory of a Party.
Article 3.3. Cumulation of Origin
1. A product originating in a Party shall be considered as originating in the other Party if used as a material in the production of another product in the other Party, provided that the working and processing carried out goes beyond one or more of the operations referred to in Article 3.6 [Insufficient working or processing] of this [Chapter].
2. Materials classified in Chapter 3 of the Harmonized System originating in the countries referred to in point b) of paragraph 4 and used in the production of canned tuna products classified in subheading 1604.14, may be considered as originating in a Party provided that the conditions in points a) to e) of paragraph 3 are fulfilled, and a notification is sent by that Party for examination by [the Special Committee on Customs, Trade Facilitation and Rules of Origin].
3. The Parties may also decide in the [Trade Committee] following a recommendation by the [Special Committee on Customs, Trade Facilitation and Rules of Origin] that certain materials originating in the third countries specified in paragraph 4 may be considered as originating in a Party if used in the production of a product in that Party, provided that:
(a) each Party has a trade agreement in force that forms a free-trade area with that third country, within the meaning of Article XXIV of GATT 1994;
(b) the origin of the materials referred to in this paragraph is determined in accordance with the rules of origin applicable under,
i) the European Union's trade agreement with that third country, when that material is used in the production of product in Chile,
ii) Chile's trade agreement with that third country, when that material is used in the production of product in the European Union;
(c) an arrangement is in force between the Party and that third country on adequate administrative cooperation ensuring full implementation of this [Chapter] including provisions on the use of appropriate documentation on the origin of materials, and that Party notifies the other Party of the arrangement;
(d) the production or processing of the materials undertaken in a Party goes beyond one or more of the operations referred to in Article 3.6 (Insufficient working or processing) of this [Chapter]; and
(e) the Parties agree on any other applicable conditions.
4. The specified third countries are those of:
a) the Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama, and
b) the Andean countries of Colombia, Ecuador and Peru.
Article 3.4. Wholly Obtained Products
1. The following products shall be considered as wholly obtained in a Party:
(a) plants and vegetable products grown or harvested there;
(b) live animals born and raised there;
(c) products obtained from live animals raised there;
(d) products obtained from hunting, trapping, fishing, gathering or capturing there;
(e) products obtained from slaughtered animals born and raised there;
(f) products obtained from aquaculture there, where aquatic organisms, including fish, molluscs, crustaceans, other aquatic invertebrates and aquatic plants are born or raised from seed stock such as eggs, roes, fry, fingerlings or larvae, by intervention in the rearing or growth processes to enhance production such as regular stocking, feeding or protection from predators;
(g) minerals or other naturally occurring substances, not included in subparagraphs (a) through (f), extracted or taken there;
(h) products of sea fishing and other products taken from the sea outside any territorial sea by a vessel of a Party;
(i) products made aboard a factory ship of a Party exclusively from products teferred to in (h);
(j) products extracted from marine soil or subsoil outside any territorial sea provided that they have rights to work that soil or subsoil;
(k) waste or scrap derived from production there or from used products collected there, provided that those products are fit only for the recovery of raw materials; and
(l) products produced there exclusively from those products specified in subparagraphs (a) to (k).
2. The terms "vessel of a Party" and "factory ship of a Party" in subparagraph 1(h) and (i) mean a vessel and factory ship, which:
(a) is registered in a Member State of the European Union or in Chile;
(b) sails under the flag of a Member State of the European Union or of Chile;
(c) meets one of the following conditions:
(i) it is more than 50% owned by nationals of a Member State of the European Union or of Chile; or
(ii) it is owned by legal persons:
- which have their head office and their main place of business in a Member State of the European Union or Chile, and
- which are more than 50% owned by persons of one of those Parties.
Article 3.5. Tolerances
1. If a non-originating material used in the production of a product does not satisfy the requirements set out in Annex II [Product-Specific Rules of Origin], that product shall be considered as originating in a Party, provided that:
(a) the total value of non-originating materials for all products (1), except for products falling within Chapters 50 to 63 of the Harmonized System, shall not exceed 10% of the ex-works ptice of the product;
(b) for a product classified under Chapters 50 to 63 of the Harmonized System, tolerances apply as stipulated in Notes 6 to 8 of Annex I [Introductory Notes to the Product-Specific Rules of Origin].
2. Paragraph 1 does not apply if the value or weight of non-originating materials used in the production of a product exceeds any of the percentages for the maximum value or weight of non-originating materials as specified in the requirements set out in Annex II [Product- Specific Rules of Origin].
3. Paragraph 1 does not apply to products wholly obtained in a Party within the meaning of Article 3.4. If Annex If [Product-Specific Rules of Origin] requires that the materials used in the production of a product are wholly obtained, paragraphs 1 and 2 shall apply.
Article 3.6. Insufficient Working or Processing
1. Notwithstanding Subparagraph 1(c) of Article 3.2, a product shall not be considered as originating in a Party if solely one or more of the following operations are conducted on non- originating materials in the production of that product in that Party:
(a) preserving operations such as drying, freezing, keeping in brine and other similar operations with the sole purpose is to ensure that the products remain in good condition during transport and storage;
(b) breaking-up and assembly of packages;
(c) washing, cleaning; removal of dust, oxide, oil, paint or other coverings;
(d) ironing or pressing of textiles and textile articles;
(e) simple painting and polishing operations;
(f) husking and partial or total milling of rice; polishing and glazing of cereals and rice;
(g) operations to colour or flavour sugar or form sugar lumps; partial or total milling of crystal sugar in solid form;
(h) peeling, stoning and shelling, of fruits, nuts and vegetables; (i) sharpening, simple grinding or simple cutting; Qj) sifting, screening, sorting, classifying, grading or matching;
(k) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;
() affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging;
(m)simple mixing of products, whether or not of different kinds; mixing of sugar with any material;
(n) simple assembly of parts of articles to constitute a complete article or disassembly of products into parts;
(0) simple addition of water or dilution or dehydration or denaturation of products; (p) slaughter of animals. For the purpose of paragraph 1, operations shall be considered simple if neither
special skills nor machines, apparatus or equipment especially produced or installed are needed for carrying out those operations.
Article 3.7. Unit of Qualification
1. For the purposes of this [Chapter], the unit of qualification shall be the particular product which is considered as the basic unit when classifying the product under the Harmonized System.
2. When a consignment consists of a number of identical products classified under the same heading of the Harmonized System, each individual product shall be taken into account when applying the provisions of this [Chapter].
Article 3.8. Accessories, Spare Parts and Tools
Accessories, spare parts and tools dispatched with a piece of equipment, machine, apparatus or vehicle, which are part of the normal equipment and included in the price thereof or which are not separately invoiced, shall be regarded as one with the piece of equipment, machine, apparatus or vehicle in question.
They shall be disregarded in determining the origin of the product except for the purposes of calculating the maximum value of non-originating materials if a product is subject to a maximum value of non-originating materials set out in Annex II [Product Specific Rules of Origin].
Article 3.9. Sets
Sets, as defined in General Rule 3 for the Interpretation of the Harmonized System, shall be regarded as originating in a Party if all their components of the set are originating products. When a set is composed of originating and non-originating products, the set as a whole shall be regarded as originating in a Party, provided that the value of the non- originating products does not exceed 15 per cent of the ex-works price of the set.
Article 3.10. Neutral Elements
In order to determine whether a product is originating in a Party, it shall not be necessary to determine the origin of the following which might be used in its manufacture: (a) fuel, energy, catalysts and solvents; (b) equipment, devices, and supplies used for testing or inspecting the products; (c) machines tools, dies and moulds; (d) spare parts and materials used in the maintenance of equipment and buildings;
(e) lubricants, greases, compounding materials and other materials used in production or used to operate equipment and buildings;
(f) gloves, glasses, footwear, clothing, safety equipment and supplies; and
(g) any other material that is not incorporated into the product but the use of which in the production of the product can be demonstrated to be part of that production.
Article 3.11. Packaging and Packing Materials
1. Where, under General Rule 5 for the Interpretation of the Harmonized System, packaging materials and containers in which a product is packed for retail sale, is included with the product for classification purposes, it shall be disregarded in determining the origin of the product, except for the purposes of calculating the maximum value of non-originating materials if a product is subject to a maximum value of non-originating materials in accordance with Annex II [Product Specific Rules of Origin].
2. Packing materials and containers for shipment that are used to protect a product during transportation shall be disregarded in determining whether a product is originating in a Party.
Article 3.12. Accounting Segregation for Fungible Materials
1. Fungible originating and non-originating materials shall be physically segregated during storage in order to maintain their originating and non-originating status, as the case may be. These materials may be used in the production of a product without being physically segregated provided an accounting segregation method is used.
2. The accounting segregation method referred to in paragraph 1 shall be applied in conformity with a stock management method under accounting principles which are generally accepted in the Party. The accounting segregation method shall ensure that at any time the number of products which could be considered as originating in a Party is no more than the number that would have been obtained by physical segregation of the stocks.