Title
Chile - Paraguay Free Trade Agreement
Preamble
PREAMBLE
The Government of the Republic of Chile and the Government of the Republic of Paraguay (hereinafter referred to as the "Parties"), resolved to:
DEEPEN the special bonds of friendship and cooperation;
EXPAND trade, enhance greater international cooperation and strengthen economic relations between their peoples for mutual benefit;
REAFFIRM its commitment to democratic principles, the rule of law, human rights, fundamental freedoms and the strengthening of democratic institutions;
CREATE a more open, secure and predictable market for reciprocal trade to facilitate the planning of business activities;
AVOID distortions and non-tariff trade barriers and other restrictive measures in reciprocal trade;
IMPLEMENT their respective rights and obligations under the WTO Agreement, as well as other multilateral and bilateral cooperation instruments;
STIMULATE and support bilateral investments, opening new integration initiatives between both countries;
MAINTAIN their respective financial systems sound and stable;
ESTABLISH a common framework of principles and rules for their bilateral trade in government procurement, with a view to its expansion under transparent conditions and as a means of promoting economic growth;
PROMOTE gender mainstreaming in international trade, encouraging equality of rights, treatment and opportunities between men and women in business, industry and the world of work, leading to women's economic empowerment and inclusive economic growth for the societies of both countries;
FACILITATE contacts between the business and private sectors of the Parties;
STRENGTHEN the competitiveness of its companies in global markets, and seek greater insertion in global and regional value chains;
PROMOTE the welfare of their workers, guarantee labour rights, cooperation and the improvement of the Parties' capacities in labour matters, and
PROMOTE the protection and conservation of the environment and the contribution of trade to sustainable development; as well as mutual cooperation on trade-related environmental issues,
HAVE AGREED as follows:
Body
Chapter 1. INITIAL PROVISIONS AND GENERAL DEFINITIONS
Article 1.1. Initial Provisions
1. The Parties, in accordance with the Treaty of Montevideo of 1980 and Article V of the GATS, decide to deepen and extend the bilateral legal framework of the expanded economic space established by ACE N° 35, in accordance with the provisions of this Agreement.
2. The Parties recognize the coexistence of this Agreement with existing international agreements to which they are party in this regard:
(a) each Party confirms its rights and obligations vis-a-vis the other Party in relation to existing international agreements to which both Parties are party, including the WTO Agreement,
(b) if Party considers that a provision of this Agreement is inconsistent (1) with a provision of another agreement to which both Parties are party, upon request, the Parties shall consult with a view to reaching a mutually satisfactory solution. This paragraph is without prejudice to the rights and obligations of the Parties under Chapter 17 (Dispute Settlement).
Article 1.2. General Definitions
For the purposes of this Agreement, unless otherwise specified: ACE No. 35 means the Economic Complementation Agreement No. 35 concluded between the Governments of the States Parties to MERCOSUR and the Government of the Republic of Chile, of 25 June 1996;
Agreement means the Trade Agreement between the Republic of Chile and the Republic of Paraguay;
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994;
GATS means the General Agreement on Trade in Services, contained in Annex 1B of the WTO Agreement;
goods means a commodity, product or merchandise;
Bilateral Administrative Commission means the Administrative Commission for the Agreement established under Article 16.1 (Bilateral Administrative Commission);
days means calendar days, including weekends and holidays; existing means in effect on the date of entry into force of this Agreement;
GATT 1994 means the General Agreement on Tariffs and Trade 1994, contained in Annex 1A of the WTO Agreement;
measure includes any law, regulation, procedure, requirement or practice; MSMEs stands for micro, small and medium-sized enterprises; national means a natural person who has the nationality of a Party:
(a) in the case of Chile, a Chilean as defined in the Political Constitution of the Republic of Chile, and
(b) in the case of Paraguay, as defined in the Constitution of the Republic of Paraguay;
WTO stands for the World Trade Organization; person means a natural person or a legal person;
person of a Party means a natural person who is a national, a permanent resident of a Party, or a legal person of a Party;
Harmonized System (HS) means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes and Chapter Notes, as adopted and implemented by the Parties in their respective legislation; and
territory means:
(a) for Chile, the land, sea and air space under its sovereignty, and the exclusive economic zone and continental shelf over which it exercises sovereign rights and jurisdiction in accordance with international law and its internal legislation, and
(b) for Paraguay, the territory subject to the sovereignty of the Republic of Paraguay in accordance with its constitutional and legal provisions, including the land, river and air space over which it exercises sovereign rights and jurisdiction in accordance with international law and its internal legislation.
Chapter 2. TRADE FACILITATION
Article 2.1. Objectives and General Principles
1, The objective of this Chapter is to contribute to the efforts of the Parties to streamline and simplify the procedures associated with import, export and transit operations of goods, through the development and implementation of measures aimed at facilitating the movement and free cross-border circulation of goods, promoting legitimate and secure trade, stimulating cooperation and dialogue between the Parties in matters related to trade facilitation.
2. In order to facilitate the realization of the benefits of this Chapter, the Parties agree that the following principles shall be the basis for the development and administration of trade facilitation measures by their competent authorities:
(a) transparency, efficiency, simplification, harmonization and consistency of import, export and transit procedures and operations;
(b) consistent, impartial, predictable and reasonable administration of relevant laws, regulations and administrative decisions relating to import, export and transit procedures and operations;
(c) promotion of relevant international standards;
(d) harmonization with relevant multilateral instruments;
(e) the best possible use of information technologies;
(f) implementation of controls based on risk management;
(g) cooperation between the customs authorities of each Party and other authorities at the border, and
(h) consultations between the Parties and their respective business communities. 3. For greater certainty, nothing in this Chapter shall be construed to diminish the rights and obligations of the Parties under Chapters 4 (Sanitary and Phytosanitary Measures) and 5 (Technical Barriers to Trade) of this Agreement.
Article 2.2. Scope
1, The Parties reaffirm their rights and obligations under the WTO Trade Facilitation Agreement.
2. Each Party shall, to the extent possible and as permitted by its respective customs laws, apply customs procedures in accordance with the trade-related instruments of the World Customs Organization (WCO) to which it is a party.
Article 2.3. Transparency
1. Each Party shall publish, to the extent practicable and in a non-discriminatory and easily accessible manner, through the internet, general legislation and procedures related to the import, export, transit of goods and trade facilitation, as well as changes to such legislation and procedures, in a manner consistent with the legal system of the Parties. This includes the following information:
(a) import, export and transit procedures, including procedures at ports, airports and other points of entry, the working hours of the competent authorities, and required forms and documents;
(b) the rates of duty and taxes of any kind levied on or in connection with importation or exportation;
(c) duties and charges levied by or on behalf of government agencies on or in connection with importation, exportation or transit;
(d) the rules for the classification or valuation of goods for customs purposes;
(e) laws, regulations and administrative provisions of general application relating to rules of origin;
(f) restrictions or prohibitions on imports, exports or transit;
(g) the provisions on penalties for infringement of import, export or transit formalities;
(h) appeal or review proceedings;
(i) agreements or parts of agreements with any country or countries relating to import, export or transit;
(j) procedures relating to the administration of tariff quotas;
(k) contact points for information enquiries, and a other relevant information of an administrative nature related to the above.
2. Each Party shall establish or maintain enquiry points to respond to reasonable requests for information on customs and other matters related to trade in goods, which may be contacted through the Internet. The Parties shall not require payment for responding to requests for information.
3. Each Party shall establish or maintain mechanisms for consultation with business operators and other interested parties on the development and implementation of trade facilitation measures, paying particular attention to the needs of MSMEs.
Article 2.4. Opportunity to Submit Observations
1. Each Party shall, to the extent possible, provide opportunities and adequate time for interested persons involved in foreign trade to comment on proposals for the introduction or modification of rulings of general application relating to import, export and transit procedures prior to their entry into force. In no case shall such comments be binding.
2. Each Party shall ensure, to the extent possible and consistent with its legal system, that new or amended legislation, procedures, customs duties and fees related to import, export and transit are published or otherwise made publicly available as soon as practicable prior to their entry into force.
3. Excluded from paragraphs 1 and 2 are changes in customs duty rates or tariff rates, measures which have the effect of relief, measures the effectiveness of which would be impaired as a result of compliance with paragraphs 1 and 2, measures to be applied in urgent circumstances or minor changes to the legal system.
Article 2.5. Clearance of Goods
1. Each Party shall adopt or maintain simplified customs procedures for the efficient clearance of goods in order to facilitate legitimate trade between the Parties.
2. To this end, each Party shall adopt or maintain procedures that:
(a) provide, to the extent possible, for advance electronic filing and processing of information prior to the physical arrival of the goods, in order to expedite their clearance; and
(b) provide for the possibility of electronic payment of duties, taxes, fees and charges collected by customs.
3. In accordance with paragraph 1, each Party shall adopt or maintain procedures that:
(a) provide for clearance to take place within a period no longer than that required to ensure compliance with customs legislation. Each Party shall continue to work on reducing clearance times;
(b) allow, to the extent possible, provided their legal system permits and all regulatory requirements have been complied with, the goods to be cleared at the point of arrival, without temporary transfer to warehouses or other premises, and
(c) allow importers, in accordance with their legal system, to remove the goods from their customs offices, prior to and without prejudice to the final determination by their customs authority of the applicable (1) customs duties, taxes and charges.
4. Each Party shall ensure, to the extent possible, that its competent authorities for the control of import and export operations of the goods coordinate, inter alia, information and document requirements, establishing a single point in time for physical verification, without prejudice to the controls that may apply in the case of post-clearance audits.
5. The Parties undertake, to the extent possible, to calculate and publish the average time required for the clearance of goods, on a regular and uniform basis, using tools such as the WCO Guide to Measuring the Time Required for the Clearance of Goods.
Article 2.6. Automation
The Parties shall endeavor to use information technology to expedite procedures for the import, export and transit of goods. To this end, the Parties shall:
(a) strive to use international standards;
(b) strive to make electronic systems accessible to users;
(c) provide for the electronic transmission and processing of information and data prior to the arrival of the goods, with the objective of enabling the release of the goods upon arrival, provided that all regulatory requirements have been met;
(d) provide for the processing of import and export operations by means of electronic documents and the possibility of digitisation of documents supporting customs declarations, as well as the use of validation mechanisms agreed in advance by the customs administrations for the secure electronic exchange of information;
(e) employ, to the extent possible, electronic or automated systems for risk analysis and targeting;
(f) adopt procedures allowing the option of electronic payment of customs duties, taxes, fees and charges determined by the customs administration to be due at the time of import and export;
(g) work towards the interoperability of the electronic systems of their customs administrations in order to facilitate the exchange of international trade data, ensuring the same levels of confidentiality and data protection as provided for in each Party's legal system;
(h) undertake to advance in the implementation of the "Standard on the Computerization of the International Cargo Manifest/Customs Transit Declaration and the Monitoring of the Goods Transit Operation" between both countries under the Agreement on International Land Transport, 1990 (ATIT), and
(i) ensure that the entities responsible for the issuance of international cargo transport permits issued under the international agreements signed in this area make progress in computer integration, in order to facilitate the exchange of the respective permits.
Article 2.7. Documentation Requirements and Details
1. Each Party shall ensure that data and documentation requirements for import, export and transit formalities:
(a) are adopted or applied for the purpose of the speedy release of goods, especially perishable goods, provided that the conditions for such release are met, and that all regulatory requirements have been complied with;
(b) are adopted or applied in a manner that tends to reduce compliance time and costs for operators, and
(c) are the least trade-restrictive measure chosen, where two or more alternative measures are reasonably available to meet the policy objective(s) in question.
Article 2.8. Advance Rulings
1. Each Party shall, prior to the importation of a good into its territory, issue an advance ruling upon the written request of an importer in its territory or an exporter or producer in the territory of the other Party. The request shall contain all necessary information including, if the importing Party so requires, a sample of the good for which an advance ruling is requested.
2. In the case of an exporter or producer in the territory of the other Party, the exporter or producer shall request advance ruling in accordance with the domestic administrative rules and procedures of the territory of the Party to whom the request is addressed.
3. Advance rulings will be issued in respect of:
(a) the tariff classification of the goods;
(b) the originating status of a good;
(c) to the extent possible, the application of customs valuation criteria for a particular case, in accordance with the provisions contained in the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, and
(d) such other matters as the Parties may agree.
4. Each Party shall issue an advance ruling no later than ninety (90) days after the expiration of a period of ninety (90) days. (90) days following the request when issuing an advance ruling, the Party shall take into account the facts and circumstances presented by the requester.
5. The advance ruling shall be valid from the date of its issuance or such later date specified in the advance ruling, and shall remain in effect for at least three (3) years, unless the law, facts, or circumstances on which the ruling was based have changed.
6. The Party issuing the advance ruling may modify or revoke it, ex officio or at the request of the party that requested it, as appropriate, in the following cases:
(a) where the advance ruling was based on an error;
(b) when the circumstances or facts on which it is based change;
(c) to comply with an administrative or judicial decision, or to conform to a change in the legal system of the Party that issued the decision, or
(d) where the advance ruling was issued on the basis of incorrect, false or misleading information or where the applicant omitted to include relevant or pertinent facts or circumstances.
7. No Party shall retroactively apply a revocation or modification to the detriment of the applicant unless the determination was based on incomplete, inaccurate or false information provided by the applicant.
8. A Party may reject a request for advance ruling where any of the following grounds, among others, are present:
(a) the customs destination that covers the merchandise has been previously presented to customs;
(b) when the merchandise is associated with any investigation or verification, or
(c) when the goods are subject to an administrative or judicial appeal related to the subject matter of the application.
In such cases, the Party shall notify the applicant, stating the reason(s) for the request.
9. Subject to confidentiality requirements under its legal system, each Party shall make publicly available, including on the Internet, any advance rulings it makes.
10. The Party issuing the advance ruling may apply appropriate sanctions or measures, including civil, criminal, and administrative actions, if the requester provided false information or omitted relevant facts or circumstances relating to the advance ruling, or failed to act in accordance with the terms and conditions of the advance ruling.
Article 2.9. Risk Management
1. Each Party shall adopt or maintain risk management or risk management systems that enable its customs authority to concentrate its inspection activities on higher risk operations, and that simplify the clearance and movement of low risk operations, while respecting the confidentiality of information obtained through these activities.
2. The customs administrations of the Parties shall apply selective control for the release of goods based on risk analysis criteria, using, inter alia, non-intrusive means of inspection and tools incorporating modern technologies, with the aim of reducing the physical inspection of goods entering their territory.
3. The Parties shall adopt cooperative programs to strengthen the risk management system, based on best practices established between their customs authorities.
Article 2.10. Perishable Goods
1, For the purposes of this Chapter, "perishable goods" means goods which decompose rapidly because of their natural characteristics, particularly in the absence of appropriate storage conditions.
2. In order to prevent avoidable loss or deterioration of perishable goods, and provided that all regulatory requirements have been met, each Party shall provide for the release of perishable goods:
(a) is carried out in the shortest time possible under normal circumstances, and
(b) is carried out outside the working hours of the customs authority and other competent authorities in exceptional circumstances where this is appropriate, in accordance with each Party's legal system.
3. Each Party shall give appropriate priority to perishable goods in scheduling and conducting the required examinations.
4. Each Party shall provide adequate facilities for the storage of perishable goods pending their release or allow an importer to provide such facilities. A Party may require that the storage facilities provided by the importer have been approved or designated by its competent authorities.
5. The movement of the goods to such storage facilities, including authorizations for the operator to move the goods, may, where required, be subject to the approval of the competent authorities.
6. Where feasible and consistent with the legal system, and at the request of the importer, each Party shall provide for the necessary procedures for clearance to take place at such storage facilities.
Article 2.11. Post-clearance Customs Control
In order to expedite the clearance of goods and maintain efficient control, the Parties' customs administrations shall adopt ex-post controls to ensure compliance with customs legislation and obligations on the basis of risk management.
Article 2.12. Review and Appeal
Each Party shall ensure, with respect to its administrative acts in customs matters, that any person subject to such acts in its territory, upon written request, has access to:
(a) an administrative review before an administrative authority independent of or superior to the official or office that issued the administrative act; and
(b) judicial review of administrative acts.