25. The resolution referred to in paragraph 24 shall not apply to imports made prior to the date on which such resolution takes effect, when:
a) the competent authority of the importing Party has issued an advance ruling under Article 7-10, or the competent authority of any Party has issued any other ruling on the tariff classification or value of materials on which a person is entitled to rely; and
b) the anticipated criterion or resolution mentioned in paragraph a), is prior to the beginning of the verification of origin.
26. Where a Party's verification establishes that the exporter or producer has falsely or unfoundedly certified or declared more than once that a good qualifies as originating, the importing Party shall suspend preferential tariff treatment for identical goods exported or produced by that person until that person proves compliance with the provisions of Chapter VI.
Article 7.08. Confidentiality
1. Each Party shall, in accordance with its laws, maintain the confidentiality of information obtained under this Chapter and protect it from disclosure that could prejudice the person providing the information.
2. Confidential information obtained under this chapter may only be disclosed to the authorities responsible for the administration and enforcement of rulings of origin and customs and tax matters.
Article 7-09. Sanctions
Each Party shall establish or maintain criminal, civil or administrative penalties for violations of its laws and regulations relating to the provisions of this Chapter.
Article 7-10. Anticipated Criteria.
1. Each Party shall provide, through its competent authority, for the expeditious issuance of written advance rulings prior to the importation of a goad into its territory. The advance rulings shall be issued by the competent authority of the territory of the importing Party, at the request of the importer or the exporter or producer in the territory of another Party, based on the facts and circumstances stated by the importer or exporter or producer with respect to the origin of the goods.
2. The above criteria do not constitute necessary and indispensable requirements for the importation of goods under preferential tariff treatment.
3. The anticipated criteria will deal with:
a) if the property qualifies as originating, in accordance with Chapter VI;
b) whether the non-originating materials used in the production of a good comply with the corresponding change in tariff classification set out in Annex 6 -03;
c) whether the good meets the regional value content requirement set forth in Chapter VI;
d) whether the method applied by the exporter or producer in the territory of another Party, in accordance with the principles of the Customs Valuation Code, for the calculation of the transaction value of the good or materials used in the production of a good for which an advance ruling is requested is adequate to determine whether the good meets the regional value content requirement under Chapter VI;
e) whether the country of origin marking made or proposed for a good satisfies the requirements of Article 3-15; and such other matters as the Parties may agree.
4. Each Party shall adopt or maintain procedures for the issuance of advance criteria upon official publication, including at least:
a) information reasonably required to process the request;
b) the power of its competent authority to request, at any time, additional information from the person requesting the advance ruling during the process of evaluating the request;
c) a period of 120 days for its competent authority to issue the advance ruling, once it has obtained all the necessary information from the person requesting it; and
d) the obligation to explain in a complete, well-founded and motivated manner, the reasons for the anticipated criterion when it is unfavorable to the applicant.
5. Each Party shall apply the advance criteria to imports into its territory as of the date of issuance of the criterion, or such later date as may be specified therein, unless the advance criterion is modified or revoked in accordance with paragraph 7.
6. Each Party shall accord to any person requesting an advance ruling, the same treatment, interpretation and application of the provisions of Chapter VI relating to the determination of origin, as it has accorded to any other person to whom it has issued an advance ruling, where the facts and circumstances are identical in all material respects.
7. The advance ruling may be modified or revoked by the competent authority in the following cases:
a) when the anticipated criterion was based on an error:
i) in fact;
ii) in the tariff classification of the good or materials subject to the criterion; or
iii) in the application of the regional value content requirement, in accordance with Chapter VI;
b) when it is not in conformity with an interpretation agreed between the Parties or a modification with respect to Article 3-15 or Chapter VI;
c) when the circumstances or facts on which it is based change; or
d) in order to comply with an administrative or judicial decision.
8. Each Party shall provide that any modification or revocation of an advance ruling shall take effect on the date on which it is issued or on a later date specified therein, and may not be applied to imports of a good made before those dates, unless the person to whom it was issued has not acted in accordance with its terms and conditions.
9. Notwithstanding the provisions of paragraph 8, the Party issuing the advance ruling shall postpone the effective date of the modification or revocation for a period of not less than 45 days, when the person to whom the advance ruling was issued has relied on that ruling in good faith.
10. Each Party shall provide that, when examining the regional value content of a good for which an advance ruling has been issued, its competent authority shall assess whether:
a) the exporter or producer complies with the terms and conditions of the anticipated criterion;
b) the exporter's or producer's operations are consistent with the circumstances and substantial facts on which such judgment is based; and
c) the supporting data and calculations used in the application of the criterion or method for calculating the value or assigning the cost are correct in all material respects.
11. Each Party shall provide that, where its competent authority determines that any of the requirements set forth in paragraph 10 have not been met, the competent authority may modify or revoke the advance ruling, as the circumstances warrant.
12. Each Party shall provide that, where its competent authority decides that the advance ruling was based on incorrect information, the person to whom the advance ruling was issued shall not be penalized, if the person demonstrates that he acted with reasonable care and in good faith in stating the facts and circumstances giving rise to the advance ruling.
13. Each Party shall provide that, where an advance ruling is issued to a person who has misrepresented or omitted material circumstances or facts on which the advance ruling is based, or has not acted in accordance with the terms and conditions of the advance ruling, the competent authority issuing the advance ruling may apply the measures set forth in each Party's legislation.
14. Each Party shall provide that the holder of an advance ruling may not use it if there is a substantial change in the facts and circumstances on which the competent authority relied to issue it.
Article 7-11. Review and Challenge.
1. Each Party shall grant rights of review and challenge of determinations of origin and advance rulings provided for in its legislation for its importers, to exporters or producers of another Party who:
a) complete and sign a certificate or declaration of origin covering a good that has been the subject of a determination of origin pursuant to paragraph 21 of Article 7 -07; or
b) have received an advance criterion in accordance with the provisions of article 7-10.
2. The rights referred to in paragraph 1 include:
a) access to at least one instance of administrative review, independent of the official or agency responsible for the advance ruling or criterion subject to review, in accordance with the legislation of each Party; and
b) access to an instance of judicial review of the resolution or decision taken in the last instance of administrative review, in accordance with the legislation of each Party.
Article 7-12. Committee of Origin
1. The Parties establish the Committee of Origin, composed of representatives of each Party. The deadline for its installation shall be within 30 days from the entry into force of this treaty.
2. The Origin Committee shall meet in ordinary session twice a year and in extraordinary session as often as necessary at the request of any Party.
3. The functions of the Origin Committee are
a) to prepare, no later than 90 days after the entry into force of the treaty, the corresponding regulations;
b) ensure the effective implementation and administration of Chapters VI and VII;
c) to attend to matters relating to the interpretation, application and administration of Chapters VI and VII;
d) seek to reach agreements on:
i) tariff classification and customs value matters related to origin determinations;
ii) amendments to the certificate or declaration of origin referred to in Article 7-02; and
iii) notification by countries of changes in their nomenclature or internal provisions on rules of origin and customs procedures for the handling of the origin of goods affecting this treaty; and
e) to attend to any other matter agreed upon by the Parties.
4. Any Party that considers that chapters VI and VII require modification, due to changes in the development of production processes, cases in which a waiver is granted under article 6-23 or other matters, may submit a proposal for modification to the Committee of Origin for its consideration and the reasons and studies that support it. The Committee of Origin shall submit a report to the Commission within 90 days of receipt of the proposal.
Chapter VIII. SAFEGUARD MEASURES
Article 8-01. Definitions.
For the purposes of this chapter, the following definitions shall apply:
threat of serious harm: the clear imminence of serious harm, determined in accordance with article 8-05, paragraph 8, based on the facts and not merely on allegation, conjecture or remote possibility;
competent authority: the "competent authority" in accordance with Annex 8 -01;
directly competing good: that which, not being similar to the one being compared, is essentially equivalent for commercial purposes because it is dedicated to the same use and is interchangeable with it;
originating good: an "originating good" of a Party, as set forth in Chapter VI;
similar good: a good which, although not the same in all respects as the good to which it is compared, has similar characteristics and composition, enabling it to fulfill the same functions and be commercially interchangeable with the latter;
serious injury: a general and significant impairment of a domestic industry, determined in accordance with paragraph 8 of article 8 -05; and
domestic industry: the producers as a whole of like or directly competitive goods operating within the territory of a Party or those whose collective production of like or directly competitive goods constitutes a major proportion of the total domestic production of such goods.
Article 8-02. General Provisions.
1. Except as provided in this Chapter, the Parties shall be governed in accordance with their legislation and the provisions of Article XIX of the GATT 1994 and the Agreement on Safeguards, which is part of the WTO Agreement.
2. Each Party may apply safeguard measures to imports of goods originating in the territory of another Party made under the Tariff Relief Program, based on clear, strict and time-bound criteria. Each Party may adopt bilateral or global safeguard measures.
Article 8-03. Bilateral Safeguard Measures.
1. Each Party may adopt and apply bilateral safeguard measures if, as a result of the reduction or elimination of a customs duty provided for in this Agreement, the volume of imports of one or more goods benefiting from the Tariff Discharge Program increases at such a rate and under such conditions as to cause serious injury or threat of serious injury to the domestic industry as follows:
a) each Party may maintain bilateral safeguard measures during and up to three years after the termination of the Tariff Discharge Program. After this period, such Party may adopt and apply a bilateral safeguard measure against the same good only with the consent of the affected Party;
b) bilateral safeguard measures may be taken only when strictly necessary to counteract serious injury or threat thereof caused by imports of goods originating in the territory of another Party;
c) bilateral safeguard measures shall be of a tariff nature and may consist of the suspension of future relief on the good in question. They may also consist of an increase in the customs duty applicable to the good to a level not to exceed the lesser of the most- favored-nation customs duty in effect on that good on the day the bilateral safeguard measure is taken and the most-favored-nation customs duty applicable to that good on the day prior to the entry into force of this Agreement;
d) the Parties may apply bilateral safeguard measures for a period of up to four years, extendable for a period of one year. The terms established shall be determined at the stage of prior consultations, by mutual agreement, in accordance with the needs of the affected domestic industry;
e) the Parties may adopt a bilateral safeguard only once on the same good when the measure has had a duration of more than two years and has been extended;
f) the Parties may adopt a bilateral safeguard for one more time on the same good when the measure has had a duration of more than two years, has not been extended, a period equal to that of the measure previously imposed has elapsed, and has the consent of the Party against whose good the measure is to be applied;
g) the Parties may adopt a bilateral safeguard for a second time on the same good when the measure has had a duration of up to two years and has been extended for one year provided that a period equal to that of the measure previously imposed has elapsed; and
h) upon completion of the application of the bilateral measure, the tariff rate that shall apply to the good in question shall be the rate applicable to that good as of that date under the Tariff Relief Program.
2. A Party that decides to initiate a procedure that could result in the adoption of a bilateral safeguard measure shall notify the exporting Party in writing and shall, at the same time, request prior consultations in accordance with the provisions of paragraphs 4 to 7 of Article 8-05.
3. Unless otherwise agreed by the Parties involved, the Party intending to adopt a bilateral safeguard measure shall grant to the Party affected by such measure, a mutually agreed compensation, in accordance with the following:
a) compensation shall consist of additional tariff concessions, the effects of which on the trade of the exporting Party are equivalent to the impact of the bilateral safeguard measure;
b) compensation shall be determined at the consultation stage referred to in paragraph 11 of article 8 -05;
c) if the Parties fail to agree on compensation, the Party seeking to adopt the bilateral safeguard measure shall have the authority to do so and the Party affected by the bilateral safeguard measure may impose tariff measures having equivalent trade effects to those of the bilateral safeguard measure adopted; and
d) the compensation referred to in this article may only be made with goods included in the Tariff Relief Program.
4. In the case of a bilateral safeguard measure for perishable or seasonal agricultural goods, the investigation periods established for the adoption of the measure shall be reduced by half unless the Parties by mutual agreement decide to reduce them even further.
Article 8-04. Global Safeguard Measures.
1. The Parties retain their rights and obligations to apply global safeguard measures under Article XIX of GATT 1994 and the Agreement on Safeguards, which is part of the WTO Agreement, except for those relating to compensation or retaliation and exclusion from a global safeguard measure insofar as they are inconsistent with the provisions of this Article.
2. Where a Party decides to adopt an aggregate safeguard measure pursuant to paragraph 1, it may apply it to another Party only when it determines that imports of goods originating in that Party, taken individually, account for a substantial part of total imports and contribute importantly to the serious injury or threat of serious injury to the importing Party.
3. For this determination, the following criteria, among others, will be taken into account:
a) imports of goods originating in another Party shall not be considered substantial if they are not included within the imports of the principal countries supplying the good subject to the procedure, whose exports together account for 80% of the total imports of that good into the importing Party;
b) imports of goods originating in a Party shall not normally be considered to contribute materially to serious injury or threat of serious injury if their rate of growth during the period in which the injurious increase in imports is substantially less than the rate of growth of total imports from all sources during the same period; and
c) changes in the Party's share of total imports and the volume of imports shall be taken into account in the determination of material contribution to serious injury or threat of serious injury.
4. The Party that applies the global safeguard measure, and has initially excluded from it a good of another Party, shall have the right to include it, when the competent authority determines that a sudden increase in imports of such good reduces the effectiveness of the global safeguard measure.
5. In no case may the importing Party apply the comprehensive safeguard measures provided for in paragraph 2, without prior written notification to the other Party and without consultations. For this purpose, all procedural requirements provided for in this Chapter shall be complied with.
6. The Party intending to adopt a global safeguard measure shall grant to the Party affected by that measure mutually agreed compensation in the form of concessions having trade effects equivalent to the impact of the global safeguard measure.
7. Unless otherwise agreed, the compensation referred to in paragraph 6 shall be determined at the consultation stage referred to in paragraph 5.
8. If the Parties fail to reach agreement on compensation, the Party proposing to take the aggregate safeguard measure shall have the authority to do so and the affected Party may impose measures that have trade effects equivalent to those of the overall safeguard measure adopted.
9. A Party shall not apply a comprehensive safeguard measure against a good originating in another Party where imports from that Party do not exceed 3% of total imports of that good provided that developing country WTO members with an import share of less than 3% do not account in aggregate for more than 9% of total imports of the good in question.
Article 8-05. Procedure.
1. Each Party shall establish clear and strict procedures for the adoption and application of safeguard measures, in accordance with the provisions of this Chapter.
2. The application submitted to the competent authority must be supported by 25% of the domestic industry.
3. Within 30 days of the filing of the application, the competent authority may reject the application, or initiate the investigation if it has determined that it is supported by producers representing at least 25% of the total production of the like or directly competitive goods.
4. The Party that decides to initiate a procedure to adopt safeguard measures shall publish the initiation thereof in the organs of dissemination provided for in its legislation. The day following publication, it shall notify the exporting Party in writing and shall request, at the same time, the holding of prior consultations.
5. The notification referred to in the preceding paragraph shall be made through the competent authority by registered mail, specialized courier, telefax or any other means that ensures its receipt. It shall contain sufficient background information to support the application of the safeguard measures, including:
a) the names and available addresses of the domestic producers of like or directly competitive goods that are representative of the domestic industry, their participation in the domestic industry of that good, and the reasons that lead them to claim that they are representative of that sector;
b) a clear and complete description of the good subject to the procedure, the tariff position at at least the six-digit level and the tariff treatment in force, as well as the description of the like or directly competitive good;
c) import data for each of the three most recent years that provide the basis that the good is being imported in increasing quantities, either in absolute terms or relative to domestic production;
d) data on total domestic production of the like or directly competitive good for the last three years;
e) data demonstrating serious injury or threat of serious injury caused by imports to the sector concerned in accordance with the data referred to in subparagraphs c) and d);
f) an enumeration and description of the alleged causes of the serious injury, or threat of serious injury based on the information required under subparagraphs a) through e) and a summary of the basis for alleging that the increase in imports of that good in absolute terms or relative to domestic production is the cause of the serious injury;
g) the criteria and objective information demonstrating that the conditions set forth in this Chapter for the application of a safeguard measure to the other Party are met, where applicable; and
h) information on the tariff measures to be adopted and their duration.
6. The period of prior consultations shall begin on the day following receipt by the exporting Party of the notification of the request to initiate prior consultations. This period shall be 60 working days, unless the Parties agree on a shorter period.
7. During the prior consultation period, the exporting Party shall make any comments it deems relevant, in particular as to whether the proposed safeguard measures are appropriate.
8. For the purposes of determining serious injury or threat of serious injury, the competent authorities shall have at their disposal reliable information and shall evaluate in detail, on the basis of such information, all factors of an objective and quantifiable nature having any bearing on the affected domestic industry, in particular, the rate and amount of the increase in imports of the good in question, in absolute and relative terms, the share of the domestic market absorbed by the increase in imports, significant changes in the level of sales, domestic prices, production, productivity, utilization of installed capacity, market share, profits, losses and employment.
9. In order to determine whether safeguard measures are warranted, a direct causal link between increased imports of the good in question and the serious injury or threat of serious injury to the domestic industry shall be demonstrated.
10. If factors other than increased imports from the other Party are injuring or threatening to injure a domestic industry at the same time, serious injury or threat thereof caused by such factors shall not be attributed to the said imports.
11. If, as a result of this investigation, the competent authority determines, on the basis of objective evidence, that the conditions set forth in this Chapter are met, the importing Party may initiate consultations with the other Party to determine the compensation referred to in paragraph 3 of Article 8-03 and paragraph 6 of Article 8 -04.
12. The provisions of this Article shall not prevent the Parties from meeting at any time to discuss compensation to the Party affected by the imposition of the safeguard measure.
13. The safeguard measures provided for in this Chapter may only be adopted after the consultation period has concluded. The final resolution adopting a safeguard measure and, as the case may be, the compensation measure, shall be published in the corresponding official publication organs of the adopting Party, as appropriate, and shall be notified to the other Party on the day following publication.
14. The notification referred to in the preceding paragraph shall be made through the competent authority by certified mail, specialized courier, telefax or any other means that ensures its receipt and shall take effect the day after it is received by the exporting Party. For such effect, the exporting Party shall acknowledge receipt of the notification the day following its receipt.
15. The Parties, at no time are obliged to disclose information that has been provided on a confidential basis, the disclosure of which would contravene their legal systems. Notwithstanding the foregoing, the importing Party that intends to adopt the safeguard measure shall provide the other Party with a non- confidential summary of the information that is confidential.
16. If the importing Party determines that the reasons that gave rise to the adoption of the safeguard measure still exist, it shall notify the competent authorities of the other Party of its intention to extend it, at least 60 working days prior to its expiration and shall provide the information supporting the decision, including evidence that the causes that led to the adoption of the safeguard measure persist. The notification shall be made in the terms provided for in this Chapter, and both the prior consultations on the extension and those related to the respective compensation shall be made before the expiration of the safeguard measures initially adopted.
17. Each Party shall ensure that the final determination by which a safeguard measure is adopted is subject to review by administrative or judicial tribunals to the extent provided for in its legislation. Negative determinations on the existence of serious injury or threat of serious injury may not be modified except by this review procedure.
Chapter IX. UNFAIR INTERNATIONAL TRADE PRACTICES
Article 9-01. Definitions.
For the purposes of this chapter, the following definitions shall apply:
WTO Agreements: the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 and the Agreement on Subsidies and Countervailing Measures, which are part of the WTO Agreement;
competent authority: the authority identified by each Party in Annex 9 -01(1);
investigating authority: the authority identified by each Party in Annex 9 -01(2);
price commitment: the commitment of the exporter or the exporting Party to revise its prices, or to terminate dumped or subsidized exports that it suspends, or to stop dumped or subsidized exports that it suspends or terminates an investigation, without imposing an antidumping duty;
countervailing duties: "antidumping duties" or "countervailing duties", in accordance with the WTO Agreements;
injury: material injury caused to a domestic industry, threat of material injury to a domestic industry, material retardation of the establishment of a domestic industry, serious injury or threat of serious injury to a domestic industry;
investigation: an investigation procedure on unfair international trade practices carried out by the investigating authority;
dissemination body: the one indicated by each Party in Annex 9 -01(3);
interested party: as defined in the WTO Agreements, and includes the government of each Party whose goods are subject to the investigation;
unfair international trade practices: the importation of dumped or subsidized goods that cause injury to a domestic industry;
domestic industry: "domestic industry" as defined in the WTO Agreements;
final determination: a determination by the competent authority that terminates an investigation and resolves whether the imposition of definitive countervailing duties is appropriate;
initial resolution: a resolution of the competent authority formally declaring the initiation of the investigation; and
preliminary determination: a determination of the competent authority that resolves on the imposition of provisional countervailing duties.