(c) changes the function of a good.
Article 2.10. Temporary Admission of Goods
Each Party shall grant duty-free temporary admission into its customs territory for the following goods in accordance with its laws and regulations, provided that such goods do not undergo any change except normal depreciation due to the use made of them and that they are exported within the time period set by each Party:
(a) goods for display or use at exhibitions, fairs, meetings or similar events;
(b) professional equipment, including equipment for the press or for sound or television broadcasting, cinematographic equipment, ancillary apparatus for such equipment and accessories thereto;
(c) commercial samples and advertising films and recordings;
(d) containers and pallets in use or to be used in the shipment of goods in international traffic and accessories and equipment therefor;
(e) welfare materials for seafarers;
(f) goods imported exclusively for scientific purposes;
(g) goods imported for international sports contests, demonstrations or training;
(h) personal effects owned by temporarily visiting travellers; and
(i) tourist publicity materials.
Article 2.11. Customs Valuation
For the purpose of determining the customs value of goods traded between the Parties, the provisions of Part I of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement shall apply, mutatis mutandis.
Article 2.12. Export Duties
A Party shall not adopt or maintain any duties, taxes, fees or other charges of any kind imposed on goods exported from that Party to the other Party, or any internal taxes or other charges on goods exported to the other Party that are in excess of those that would be imposed on like goods destined for domestic consumption. For the purposes of this Article, fees or other charges of any kind shall not include fees or other charges imposed in accordance with Article 2.16 that are limited to the amount of the approximate cost of service rendered.
Article 2.13. Standstill
1. Unless otherwise provided for in this Agreement, a Party shall not increase any customs duty on originating goods of the other Party from the rate to be applied in accordance with Annex 2-A.
2. For greater certainty, a Party may raise a customs duty to the level set out in the Schedule of the United Kingdom in Section B of Part 2 of Annex 2-A and in the Schedule of Japan in Section D of Part 3 of Annex 2-A for the respective year following a unilateral reduction of the customs duty.
Article 2.14. Export Competition
1. For the purposes of this Article, "export subsidies" means subsidies referred to in subparagraph (e) of Article 1 of the Agreement on Agriculture and other subsidies listed in Annex I to the SCM Agreement that may be applied to agricultural goods which are listed in Annex 1 to the Agreement on Agriculture.
2. The Parties affirm their commitment, expressed in the Ministerial Decision of 19 December 2015 on Export Competition (WT/MIN(15)/45, WT/L/980) of the WTO, to exercise utmost restraint with regard to export subsidies and export measures with equivalent effect as set out in that decision.
Article 2.15. Import and Export Restrictions
1. A Party shall not adopt or maintain any prohibition or restriction other than customs duties on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the customs territory of the other Party, except in accordance with Article XI of GATT 1994. To that end, Article XI of GATT 1994 is incorporated into and made part of this Agreement, mutatis mutandis.
2. If a Party intends to adopt a prohibition or restriction on the exportation or sale for export of any good listed in Annex 2-B in accordance with paragraph 2 of Article XI or with Article XX of GATT 1994, the Party shall:
(a) seek to limit that prohibition or restriction to the extent necessary, giving due consideration to its possible negative effects on the other Party;
(b) provide the other Party with written notice thereof, wherever possible prior to the introduction of such prohibition or restriction and as far in advance as practicable, or, if not, no later than 15 days after the date of introduction, whereby that written notice shall include a description of the good involved and the introduced prohibition or restriction, including its nature, its reasons, and the date of introduction of such prohibition or restriction as well as its expected duration; and
(c) upon request, provide the other Party with a reasonable opportunity for consultation with respect to any matter related to such prohibition or restriction.
Article 2.16. Fees and Formalities Connected with Importation and Exportation
1. Each Party shall ensure, in accordance with Article VII of GATT 1994, that all fees and charges of whatever character, other than customs duties, export duties and taxes in accordance with Article III of GATT 1994, imposed by that Party on or in connection with importation or exportation are limited to the amount of the approximate cost of services rendered, which shall not be calculated on an ad valorem basis, and shall not represent an indirect protection to domestic goods or a taxation of imports for fiscal purposes.
2. A Party shall not require consular transactions, including related fees and charges. For the purposes of this paragraph, "consular transactions" means requirements by the consul of the importing Party located in the exporting Party for the purpose 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.
Article 2.17. Import and Export Licensing Procedures
1. The Parties affirm their existing rights and obligations under the Agreement on Import Licensing Procedures.
2. Each Party shall adopt or maintain export licensing procedures in accordance with paragraphs 1 to 9 of Article 1 and with Article 3 of the Agreement on Import Licensing Procedures. A Party may adopt or maintain export licensing procedures in accordance with Article 2 of the Agreement on Import Licensing Procedures. To that end, those provisions of the Agreement on Import Licensing Procedures are incorporated into and made part of this Agreement, mutatis mutandis, and shall apply to export licensing procedures between the Parties. Paragraphs 2 to 8 apply to any good listed in Annex 2-B.
3. Each Party shall ensure that all export licensing procedures are neutral in application and administered in a fair, equitable, non-discriminatory and transparent manner.
4. Each Party shall adopt or maintain import or export licensing procedures only when other appropriate procedures to achieve an administrative purpose are not reasonably available.
5. A Party shall not adopt or maintain non-automatic import or export licensing procedures unless necessary to implement a measure that is consistent with this Agreement. A Party adopting non-automatic licensing procedures shall clearly indicate the measure being implemented through such licensing procedures.
6. Each Party shall respond, within 60 days, to any enquiry from the other Party regarding import or export licensing procedures which the former Party intends to adopt, has adopted or maintains, as well as the criteria for granting or allocating import or export licenses.
7. Inapplying export restrictions to a good in the form of a quota, a Party shall aim at a distribution of trade in that good approaching as closely as possible the shares which would be expected in the absence of that restriction.
8. If a Party adopts or maintains export licensing procedures, the Parties shall hold consultations, on request of the other Party, on any issues related to the implementation of those procedures, and give due consideration to the results of those consultations.
Article 2.18. Remanufactured Goods
1. Unless otherwise provided for in this Agreement, each Party shall provide that remanufactured goods are treated as new goods. Each Party may require that remanufactured goods be identified as such for distribution or sale.
2. For the purposes of this Article, "remanufactured goods" means goods classified under heading 40.12, Chapters 84 to 90 or heading 94.02 of the Harmonized System that: (1)
(a) are entirely or partially composed of parts obtained from used goods;
(b) have a similar life expectancy and performance compared to such goods, when new; and
(c) have a factory warranty similar to that applicable to such goods, when new.
Article 2.19. Non-tariff Measures
1. Specific commitments relating to non-tariff measures on goods by each Party are set out in Annexes 2-C and 2-D.
2. After 10 years from the date of entry into force of this Agreement, or on request of a Party, the Parties shall evaluate whether issues resulting from non-tariff measures on goods can be addressed effectively within the framework of this Agreement. As a result of this evaluation, the Parties shall enter into consultations to consider broadening the scope of existing commitments or undertaking additional commitments of mutual interest on non-tariff measures on goods, including on cooperation. On the basis of those consultations, the Parties may agree to enter into negotiations of mutual interest. In implementing this paragraph, the Parties shall take into account the experience gained during the preceding period of implementation of this Agreement.
Article 2.20. Restrictions to Safeguard the Balance of Payments
1. Nothing in this Agreement shall be construed as preventing a Party from taking any measures for balance-of-payments purposes. A Party taking such measures shall do so in accordance with the conditions established in Article XII of GATT 1994 and the Understanding on the Balance-of-Payments Provisions of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement. 2. Nothing in this Agreement shall preclude the use by a Party of exchange controls or exchange restrictions in accordance with the Articles of Agreement of the International Monetary Fund.
Article 2.21. General Exceptions
1. For the purposes of this Chapter, Article XX of GATT 1994 is hereby incorporated into and made part of this Agreement, mutatis mutandis.
2. Ifa Party intends to take any measures in accordance with subparagraphs (i) and (j) of Article XX of GATT 1994, the Party shall:
(a) provide the other Party with all relevant information; and
(b) upon request, provide the other Party with a reasonable opportunity for consultation with respect to any matter related to such measure, with a view to seeking a mutually acceptable solution.
3. The Parties may agree on any means needed to put an end to the matters subject to consultation referred to in subparagraph 2(b).
4. If exceptional and critical circumstances requiring immediate action make prior provision of information or examination impossible, a Party intending to take the measures concerned may apply immediately the measures necessary to deal with the circumstances and shall immediately inform the other Party thereof.
Section C. Facilitation of Wine Product Export
Article 2.22. Scope
The provisions of this Section do not apply to any goods other than wine products classified under the heading 22.04 of the Harmonized System.
Article 2.23. General Principle
Unless otherwise provided for in Articles 2.24 to 2.27, the importation and sale of wine products traded between the Parties covered by this Section shall be conducted in compliance with the laws and regulations of the importing Party.
Article 2.24. Authorisation of Oenological Practices - Phase One
1. The United Kingdom shall authorise the importation and sale of wine products for human consumption in the United Kingdom originating in Japan and produced in accordance with:
(a) product definitions and oenological practices authorised and restrictions applied in Japan for the sale of Japan wine as referred to in Section A of Part 2 of Annex 2-E provided that they comply with product definitions and oenological practices and restrictions as referred to in Section A of Part 1 of Annex 2-E; and
(b) the oenological practices as referred to in Section B of Part 2 of Annex 2-E.
2. Japan shall authorise the importation and sale of wine products for human consumption in Japan originating in the United Kingdom and produced in accordance with:
(a) product definitions and oenological practices authorised and restrictions applied in the United Kingdom as referred to in Section A of Part 1 of Annex 2-E provided that they comply with product definitions and oenological practices and restrictions as referred to in Section A of Part 2 of Annex 2-E; and
(b) the oenological practices as referred to in Section B of Part 1 of Annex 2-E.
Article 2.25. Authorisation of Oenological Practices â Phase Two
1. The United Kingdom shall expeditiously take necessary steps with a view to authorising the oenological practices as referred to in Section C of Part 2 of Annex 2-E and notify Japan that its procedures for that authorisation have been completed.
2. Japan shall expeditiously take necessary steps with a view to authorising the oenological practices as referred to in Section C of Part 1 of Annex 2-E and notify the United Kingdom that its procedures for that authorisation have been completed.
3. The authorisation referred to in paragraphs 1 and 2 shall enter into force on the date of the latter notification by either Party.
Article 2.26. Authorisation of Oenological Practices - Phase Three
1. The United Kingdom shall take necessary steps with a view to authorising the oenological practices as referred to in Section D of Part 2 of Annex 2-E and notify Japan that its procedures for that authorisation have been completed.
2. Japan shall take necessary steps with a view to authorising the oenological practices as referred to in Section D of Part 1 of Annex 2-E and notify the United Kingdom that its procedures for that authorisation have been completed.
3. The authorisation referred to in paragraphs 1 and 2 shall enter into force on the date of the latter notification by either Party.
Article 2.27. Self-certification
1. A certificate authenticated in conformity with the laws and regulations of Japan, including a self-certificate established by a producer authorised by the competent authority of Japan, shall suffice as documentation serving as evidence that the requirements for the importation and sale in the United Kingdom of wine products originating in Japan referred to in Article 2.24, 2.25 or 2.26 have been fulfilled.
2. The Working Group on Wine established pursuant to Article 23.4 shall adopt, upon the entry into force of this Agreement, by decision, the modalities:
(a) for the implementation of paragraph 1, in particular the forms to be used and the information to be provided on the certificate; and
(b) for the cooperation between the contact points designated by the Parties.
3. No certificate or other equivalent documentation is required as evidence that the requirements for the importation and sale in Japan of wine products originating in the United Kingdom referred to in Article 2.24, 2.25 or 2.26 have been fulfilled.
Article 2.28. Review, Consultations and Temporary Suspension of Self-certification
1. The Parties shall review the implementation of:
(a) Article 2.25 regularly and at least once a year during the two years after the date of entry into force of this Agreement; and
(b) Article 2.26 no later than three years after the date of entry into force of this Agreement.
2. If the Parties find, in the process of review of the implementation of Article 2.25, that the notifications provided for in Article 2.25 have not been exchanged within two years of the date of entry into force of this Agreement, the Parties shall enter into consultations with a view to agreeing on a practical solution.
3. Where the notification referred to in paragraph 2 of Article 2.25 has not been sent within two years of the date of entry into force of this Agreement and the notification referred to in paragraph 1 of Article 2.25 has been sent, the United Kingdom may temporarily suspend the acceptance of self-certification of wine products provided for in Article 2.27, if a practical solution as referred to in paragraph 2 is not agreed upon within three months of the initiation of the consultations referred to in paragraph 2.
4. The temporary suspension of the acceptance of the self-certification referred to in paragraph 3 shall be immediately terminated when Japan sends the notification provided for in paragraph 2 of Article 2.25 to the United Kingdom.
5. If the Parties find, in the process of review on the implementation of Article 2.26 referred to in subparagraph 1(b), that the notifications provided for in Article 2.26 have not been exchanged within five years of the date of entry into force of this Agreement, the Parties shall enter into consultations.
6. Nothing in this Article shall affect the rights and obligations of a Party under the SPS Agreement.
Article 2.29. Standstill
1. For matters covered by Articles 2.24 to 2.27, a Party shall not impose less favourable conditions than those provided for in this Section or in its laws and regulations in force on the date of signature of this Agreement.
2. Paragraph 1 shall be without prejudice to the right of the Parties to take sanitary and phytosanitary measures necessary for the protection of human, animal or plant life or health, provided that such measures are not inconsistent with the provisions of the SPS Agreement.
Article 2.30. Amendments
The Joint Committee may adopt decisions amending Annex 2-E, to add, delete or modify references to oenological practices, restrictions and other elements, in accordance with paragraph 3 of Article 24.2.
Section D. Other Provisions
Article 2.31. Exchange of Information
1. For the purpose of monitoring the functioning of this Agreement and for the period of 10 years after the entry into force of this Agreement, or for such period of time as may be decided by the Committee on Trade in Goods established pursuant to Article 23.3, the Parties shall annually exchange import statistics for the period covering the most recent calendar year available.
2. The exchange of import statistics referred to in paragraph 1 shall cover, to the extent possible, data pertaining to the period covering the most recent calendar year available, including value and volume, or such data as may be decided by the Committee on Trade in Goods, based on the nomenclature of the Party, of imports of goods of the other Party benefitting from preferential tariff treatment under this Agreement and those that do not receive preferential tariff treatment.
Article 2.32. Special Measures Concerning the Management of Preferential Tariff Treatment
1. The Parties recognise that breaches of their customs legislation relating to the preferential tariff treatment under this Agreement could adversely affect the domestic industry and agree to cooperate on preventing, detecting and combating such breaches in accordance with the relevant provisions of Chapter 3 and an agreement on cooperation and mutual administrative assistance in customs matters to be concluded between the Governments of the Parties (hereinafter referred to as "CMAA").
2. A Party may, in accordance with the procedure laid down in paragraphs 4 to 7, temporarily suspend the preferential tariff treatment under this Agreement for the goods concerned which are related to the systematic breaches referred to in subparagraph (a), if the Party has made a finding, on the basis of objective, compelling and verifiable information, that:
(a) systematic breaches in its customs legislation related to the preferential tariff treatment under this Agreement for a certain good have been committed; and
(b) the other Party has systematically and unjustifiably refused or has otherwise failed to conduct the cooperation referred to in paragraph 1 in relation to the systematic breaches referred to in subparagraph (a).
3. Notwithstanding paragraph 2, the temporary suspension shall not be applied to traders who fulfil the compliance criteria agreed by the Parties through the consultations referred to in paragraph 4.
4. The Party which has made the finding referred to in paragraph 2 shall, without undue delay, notify the other Party of that finding with sufficient information to justify the initiation of consultations, including a summary of essential facts related to subparagraphs 2(a) and (b), and enter into consultations with the other Party in the Committee on Trade in Goods with a view to reaching a solution acceptable to both Parties and agreeing on the compliance criteria with regard to the requirements of this Agreement and the relevant customs legislation.
5. The Party which has made the finding referred to in paragraph 2 shall, before a final decision is made, inform all interested parties of its intention to apply a temporary suspension, and shall ensure that they have a full opportunity for defending their interests. A temporary suspension shall not be applied to interested parties, provided that they objectively and satisfactorily demonstrate to the Party which has made the finding that they are not involved in the systematic breaches referred to in subparagraph 2(a).
6. Following the processes referred to in paragraphs 4 and 5, if the Parties have failed to agree on an acceptable solution within six months of the notification, the Party which has made the finding may decide to suspend temporarily the preferential tariff treatment under this Agreement for the goods concerned, duly taking into account the exception provided for in paragraph 3. A temporary suspension shall be notified to the other Party without undue delay.
7. A temporary suspension shall be applied only for the period necessary to counteract the breaches and no longer than six months. If a Party has made a finding that the conditions that gave rise to the initial suspension persist at the expiry of the temporary suspension, that Party may decide to renew the temporary suspension, after notifying the other Party of such a finding with sufficient information to justify the renewal. Any temporary suspension shall be terminated on a date no later than two years from the initial suspension unless it has been demonstrated to the Committee on Trade in Goods that the conditions that gave rise to the initial suspension still persist at the expiry of the period of each renewal.
8. The applied temporary suspensions shall be subject to periodic consultations in the Committee on Trade in Goods.
9. The Party which has made the finding referred to in paragraph 2 or 7 shall publish, in accordance with its internal procedures, notices to importers about any notification and decision concerning temporary suspensions referred to in paragraphs 4 to 7.
10. A temporary suspension shall not apply to traders other than the traders referred to in paragraph 3 and the interested parties referred to in paragraph 5, provided that they objectively and satisfactorily demonstrate to the Party which has made the finding referred to in paragraph 2 or 7 that they are not involved in the systematic breaches referred to in subparagraph 2(a).
11. For greater certainty, nothing in this Article shall be construed as preventing traders or interested parties from claiming compensation for damage illegally incurred by the measures referred to in paragraph 6, against the Party which has made the finding referred to in paragraph 2 or 7, in accordance with its laws and regulations.
Article 2.33. Committee on Trade In Goods
1. The Committee on Trade in Goods established pursuant to Article 23.3 (hereinafter referred to in this Article as "the Committee") shall be responsible for the effective implementation and operation of this Chapter.
2. The Committee shall have the following functions:
(a) reviewing and monitoring the implementation and operation of this Chapter;
(b) reporting the findings of the Committee to the Joint Committee;
(c) reviewing and monitoring the design and operation of the scheme set out in Section B of Part 3 of Annex 2-A to provide the greatest possible market access for the goods covered by that Section;
(d) deciding on the matters concerning the exchange of information referred to in Article 2.31; and
(e) carrying out other functions as may be delegated by the Joint Committee pursuant to subparagraph 5(b) of Article 23.1.
3. The Committee shall hold meetings at such times and venues, or by such means, as may be agreed by the representatives of the Parties.
Article 2.34. Working Group on Wine
1. The Working Group on Wine established pursuant to Article 23.4 shall be responsible for the effective implementation and operation of Section C and Annex 2-E.
2. The Working Group on Wine shall have the following functions:
(a) adopting the modalities concerning the self-certification referred to in paragraph 2 of Article 2.27;
(b) monitoring the implementation of Articles 2.24 to 2.28, including the review and consultations under Article 2.28; and
(c) considering amendments of Annex 2-E and making recommendations to the Joint Committee regarding the adoption of a decision with respect to those amendments.
3. The Working Group on Wine shall hold its first meeting on the date of entry into force of this Agreement.
Chapter 3. RULES OF ORIGIN AND ORIGIN PROCEDURES
Section A. Rules of Origin
Article 3.1. Definitions
For the purposes of this Chapter:
(a) "aquaculture" means the farming of aquatic organisms, including fish, aquatic invertebrates (including molluscs and crustaceans) or aquatic plants from seed stock such as eggs, fry, fingerlings, larvae, parr, smolts or other immature fish at a post-larval stage by intervention in the rearing or growth processes to enhance production such as regular stocking, feeding or protection from predators;
(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) "exporter" means a person, located in a Party, who, in accordance with the requirements laid down in the laws and regulations of that Party, exports or produces the originating product and makes out a statement on origin;
(d) "importer" means a person who imports the originating product and claims preferential tariff treatment for it;
(e) "material" means any matter or substance used in the production of a product, including any components, ingredients, raw materials or parts;
(f) "non-originating material" means a material which does not qualify as originating under this Chapter, including a material whose originating status cannot be determined;
(g) "preferential tariff treatment" means the rate of customs duties applicable to an originating good in accordance with paragraph 1 of Article 2.8;
(h) "product" means any matter or substance resulting from production, even if it is intended for use as a material in the production of another product, and shall be understood as a good referred to in Chapter 2; and
(i) "production" means any kind of working or processing including assembly.
Article 3.2. Requirements for Originating Products
1. For the purpose of the application of preferential tariff treatment by a Party to an originating good of the other Party in accordance with paragraph 1 of Article 2.8, the following products, if they satisfy all other applicable requirements of this Chapter, shall be considered as originating in the other Party:
(a) wholly obtained or produced products as provided for in Article 3.3;
(b) products produced exclusively from materials originating in that Party; or