(a) promoting trade in goods between the Parties, including through consultations on accelerating tariff elimination under this Agreement and other issues as appropriate;
(b) addressing 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 Free Trade Commission for its consideration;
(c) reviewing the future amendments to the HS to ensure that each Party’s obligations under this Agreement are not altered, and consulting to resolve any conflicts between:
(i) subsequent amendments to Harmonized System 2007 and Annex 2 (Tariff Elimination); or
(ii) the Annex 2 (Tariff Elimination) and national nomenclatures;
(d) consulting on and endeavoring to resolve any difference that may arise among the Parties on matters related to the classification of goods under the HS; and
(e) establishing Ad-Hoc Working Groups with specific commands.
5. The Committee shall meet at least once a year. When special circumstances arise, the Parties shall meet at any time upon agreement at the request of a Party.
6. The Committee shall establish an Ad-Hoc Working Group on Trade in Agricultural and Fishery Goods. In order to solve any obstacle to the trade of agricultural and fishery goods between the Parties, the Working Group shall meet within 30 days after the Parties agree.
Section H. Definitions
Article 21. Definition
For purposes of this Chapter:
AD Agreement means the WTO Agreement on Implementation of Article VI of the GATT 1994;
SCM Agreement means the WTO Agreement on Subsidies and Countervailing Measures;
Import Licensing Agreement means the WTO Agreement on Import Licensing Procedures; consumed means:
(a) actually consumed; or
(b) further processed or manufactured so as to result in a substantial change in the value, form, or use of the good or in the production of another good;
duty-free means free of customs duty;
import licensing means an administrative procedure requiring the submission of an application or other documentation (other than that generally required for customs clearance purposes) to the relevant administrative body as a prior condition for importation into the territory of the importing Party;
goods intended for display or demonstration includes their component parts, ancillary apparatus, and accessories;
performance requirement means a requirement that:
(a) a given level or percentage of goods or services be exported;
(b) domestic goods or services of the Party granting a waiver of customs duties or an import license be substituted for imported goods;
(c) a person benefiting from a waiver of customs duties or an import license purchase other goods or services in the territory of the Party granting the waiver of customs duties or the import license, or accord a preference to domestically produced goods;
(d) a person benefiting from a waiver of customs duties or an import license produce goods or supply services, in the territory of the Party granting the waiver of customs duties or the import license, with a given level or percentage of domestic content; or
(e) relates in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows;
but does not include a requirement that an imported good be:
(f) subsequently exported;
(g) used as a material in the production of another good that is subsequently exported;
(h) substituted by an identical or similar good used as a material in the production of another good that is subsequently exported; or
(i) substituted by an identical or similar good that is subsequently exported;
export subsidies shall have the meaning assigned to that term in Article 1(e) of the WTO Agreement on Agriculture, including any amendment of that Article; and
consular transactions means requirements that goods of a Party intended for export to the territory of another Party must first be submitted to the supervision of the consul of the importing Party in the territory of 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.
Chapter 3. RULES OF ORIGIN AND OPERATIONAL PROCEDURES RELATED TO ORIGIN
Section A. Rules of Origin
Article 22. Definitions
For purposes of this Chapter:
aquaculture means the farming of aquatic organisms, including fish, mollusks, crustaceans, other aquatic invertebrates and aquatic plants, from seedstock such as eggs, fries, fingerlings and larvae, by intervention in the rearing or growth processes to enhance production, such as regular stocking, feeding, protection from predators, etc.;
authorized body means any body authorized under the domestic legislation of a Party to issue a Certificate of Origin;
FOB means the value of the good free on board, inclusive of the cost of transportation to the port or site of final shipment abroad, independent of the means of transportation;
CIF means the value of the good imported inclusive of the cost of insurance and freight up to the port or place of entry in the country of importation;
competent authority means:
(a) for China, the application and administration of the Rules of Origin under this Agreement shall be organized by the General Administration of Customs; and
(b) for Peru, by the Ministry of Foreign Trade and Tourism, or its successor;
fungible goods or materials means goods or materials that are interchangeable for commercial purposes and whose properties are essentially identical;
Generally Accepted Accounting Principles means the recognized consensus or substantial authoritative support in the territory of a Party, with respect to the recording of revenues, expenses, costs, assets, and liabilities, the disclosure of information and the preparation of financial statements. Generally Accepted Accounting Principles may encompass broad guidelines for general application, as well as detailed standards, practices, and procedures;
identical goods means “identical goods”, as defined in the Customs Valuation Agreement;
material means a good used in the production of another good, including any components, ingredients, raw materials, parts or pieces;
production means growing, raising, extracting, picking, gathering, mining, harvesting, fishing, trapping, hunting, manufacturing, processing or assembling a good; and
producer means a person who grows, raises, extracts, picks, gathers, mines, harvests, fishes, traps, hunts, manufactures, processes or assembles a good.
Article 23. Originating Goods
Unless otherwise indicated in this Chapter, and on the condition that a good meets all the other applicable requirements of this Chapter, the good shall be regarded as originating from a Party when:
(a) the good is wholly obtained or produced entirely in the territory of one or both Parties, within the meaning of Article 24 (Wholly Obtained Goods), including where required under Annex 4 (Product Specific Rules of Origin);
(b) the good is produced in the territory of one or both Parties, exclusively from materials whose origin conforms to the provisions of this Chapter; or
(c) the good is produced in the territory of one or both Parties, using non-originating materials that conform to a change in tariff classification, a regional value content, a process requirement or other requirements specified in Annex 4 (Product Specific Rules of Origin).
Article 24. Wholly Obtained Goods
For the purpose of subparagraph (a) of Article 23 (Originating Goods), the following goods shall be regarded as wholly obtained or produced entirely in the territory of one or both Parties:
(a) live animals, born and raised in China or Peru;
(b) goodsobtainedfromliveanimalsraisedinChinaorPeru;
(c) goods obtained by hunting, trapping, fishing or aquaculture in China or Peru;
(d) fish, shellfish and other marine life taken from the sea beyond the territory of a Party, by a vessel flying the flag of China or Peru;
(e) goods manufactured on board a factory ship flying the flag of China or Peru, exclusively from goods referred to in subparagraph (d);
(f) plants and plants products harvested, picked or gathered in China or Peru;
(g) mineral goods and other naturally occurring substances extracted from the soil, waters, seabed or beneath the seabed of China or Peru;
(h) goods other than fish, shellfish and other marine life taken or extracted by a Party from the waters, seabed or beneath the seabed outside China or Peru, provided that that Party has rights to exploit them;
(i) waste and scrap derived from:
(i) manufacturing operations conducted in China or Peru; or
(ii) used goods collected in China or Peru;
provided that such waste and scrap is fit only for the recovery of raw materials; and
(j) goods produced in China or Peru exclusively from goods specified in subparagraphs (a) to (i).
Article 25. Change In Tariff Classification
A change in tariff classification requires that the non-originating materials used in the production of the goods undergo a change in tariff classification as specified in Annex 4 (Product Specific Rules of Origin) as a result of production processes performed in the territory of one or both Parties.
Article 26.
1. The regional value content of a good shall be calculated on the basis of the following method:
FOB – VNM
RVC = --------------------- x 100
FOB
where:
RVC: is the regional value content, expressed as a percentage; FOB: is the Free On Board value of the good; and
VNM: is the value of the non-originating materials.
2. The value of the non-originating materials shall be:
(a) the CIF value at the time of importation of the material; or
(b) the earliest ascertained price paid or payable for the non-originating materials in the territory of the Party where the working or processing takes place. When the producer of a good acquires non-originating materials within that Party, the value of such materials shall not include freight, insurance, packing costs and any other costs incurred in transporting the material from the supplier’s warehouse to the producer’s location.
3. The values referred to above shall be determined pursuant to the Customs Valuation Agreement.
Article 27. Minimal Operations or Processes
Operations or processes which contribute minimally to the essential characteristics of the goods, either by themselves or in combination, are considered to be minimal operations or processes and do not confer origin, notwithstanding that the good or materials satisfies with the provisions of this Chapter. These include:
(a) operations to ensure the preservation of goods in good condition during transport and storage;
(b) breaking-uporassemblyofconsignments;
(c) packing, unpacking or repacking operations for retail sale purposes; or
(d) slaughter of animals.
Article 28. Accumulation
1. Originating goods or materials from the territory of a Party, incorporated into a good in the territory of the other Party, shall be considered as originating in the territory of that other Party.
2. A good shall be considered as originating where its production is carried out by one or more producers in the territory of a Party, in such way that the production of the materials incorporated in that good, carried out in the territory of that Party, may be considered as part of the production of the good, provided that the good complies with the requirements established in Article 23 (Originating Goods) and all other applicable requirements in this Chapter.
Article 29. De Minimis
1. A good that does not meet the change in tariff classification, pursuant to Annex 4 (Product Specific Rules of Origin), shall be considered to be originating if the value of all non-originating materials used in its production not meeting the change in tariff classification does not exceed 10% of the value of the good, determined pursuant to Article 26 (Regional Value Content (RVC)). Additionally, the good shall satisfy all other applicable requirements in this Chapter.
2. Where the good mentioned in paragraph 1 is also subject to a regional value content requirement, the value of all non-originating materials shall be considered for calculating the regional value content of the good. Additionally, the good shall satisfy all other applicable requirements in this Chapter.
Article 30. Fungible Goods or Materials
1. In determining whether a good is an originating good, any fungible goods or materials shall be distinguished by:
(a) physical separation of the goods or materials; or
(b) an inventory management method recognized in the Generally Accepted Accounting Principles of the exporting Party.
2. The inventory management method selected under paragraph 1 for a particular fungible good or material shall continue to be used for that good or material throughout the fiscal year of the person that selected the inventory management method.
Article 31. Sets
Sets, as defined in General Rule 3 of the HS, shall be regarded as originating when all the components of the sets are originating. Nevertheless, when a set is composed of originating and non-originating goods, the set as a whole shall be regarded as originating, provided that the value of the non-originating goods does not exceed 15% of the total value of the set, determined pursuant to Article 26 (Regional Value Content (RVC)).
Article 32. Accessories, Spare Parts and Tools
1. With regard to the change in tariff classification requirements, specified in Annex 4 (Product Specific Rules of Origin), accessories, spare parts, tools, and instructional and information materials presented with the good upon importation shall be disregarded in the determination of the origin of the good, provided that these are classified with and not invoiced separately from the good.
2.Where the good is subject to an RVC requirement, the value of the accessories, spare parts, tools, and instructional and information materials shall be taken into account as originating materials or non-originating materials, as the case may be, for calculating the RVC of the good, provided that these are classified with and not invoiced separately from the good.
3. This Article applies only where the quantities and values of said accessories spare parts, tools, and instructional and information materials are customary for the good.
Article 33. Packaging Materials and Containers for Retail Sale
1. Where the packaging materials and containers are classified with the good, the origin of the packaging materials and containers in which a good is packaged for retail sale, shall be disregarded in determining the origin of the good, provided that:
(a) the good is wholly obtained or entirely produced as defined in subparagraph (a) of Article 23 (Originating Goods);
(b) the good is produced exclusively from originating materials, as defined in subparagraph (b) of Article 23 (Originating Goods); or
(c) the good is subject to a change in tariff classification requirement set out in Annex 4 (Product Specific Rules of Origin).
2. Where the good is subject to a regional value content requirement, the value of the packaging materials and containers used for retail sale shall be taken into account when determining the origin of the good.
Article 34. Packing Materials and Containers for Shipment
The packing materials and containers used to protect a good during its transportation shall not be taken into account when determining the origin of the good.
Article 35. Neutral Elements
1. In order to determine whether a good is originating, the origin of the neutral elements defined in paragraph 2 shall not be taken into account.
2. Neutral elements mean articles used in the production of a good which are not physically incorporated into it, neither form part of it, including:
(a) fuel, energy, catalysts and solvents;
(b) equipment, devices, and supplies used for testing or inspecting the goods;
(c) gloves, glasses, footwear, clothing, safety equipment and supplies;
(d) tools,diesandmolds;
(e) spare parts and materials used in the maintenance of equipment and buildings;
(f) lubricants, greases, compounding materials and other materials used in production or used to operate equipment and buildings; and
(g) any other goods that are not incorporated into the good but whose use in the production of the good can reasonably be demonstrated to be a part of that production.
Article 36. Direct Transport
1. In order for originating goods to maintain their originating status, the goods shall be transported directly between the Parties.
2. Notwithstanding paragraph 1, the following shall be considered as transported directly from the exporting Party to the importing Party:
(a) goods that are transported without passing through the territory of a non-Party; and
(b) goods whose transport involves transit through one or more non-Parties, with or without trans-shipment or temporary storage of up to 3 months in such non-Parties, provided that:
(i) the goods do not enter into trade or commerce there; and
(ii) the goods do not undergo any operation there other than unloading and reloading, repacking, or any operation required to keep them in good condition.
3. Compliance with the provisions set out in paragraphs 1 and 2 shall be authenticated by presenting to the competent authority of the importing Party, either with customs documents of the non-Parties or with any other documents so provided to the satisfaction of the competent authority of the importing Party.
Article 37. Exhibitions
1. Preferential tariff treatment as provided for under this Agreement shall be granted to originating goods, sent for exhibition in a non-Party and sold after the exhibition for importation in China or Peru, when the following conditions are met to the satisfaction of the customs authority of the importing Party:
(a) an exporter has consigned these goods from China or Peru to the non-Party where the exhibition has actually taken place;
(b) the goods have been sold or otherwise disposed of by that exporter to a person in China or Peru;
(c) the goods have been consigned during the exhibition or immediately thereafter in the state in which they were sent for exhibition;
(d) the goods have not been used for any purpose other than demonstration at the exhibition since they were consigned for exhibition; and
(e) the goods have remained during the exhibition under customs authority control.
2. For purposes of application of paragraph 1, a Certificate of Origin shall be issued in accordance with the provisions of this Chapter and submitted to the customs authority of the importing Party, with the name and address of the exhibition being attached thereon. Where necessary, additional documentary evidence related to the exhibition may be required.
3. Paragraph 1 shall apply to any trade, industrial, agricultural or crafts exhibition, fair or similar public show or display which is not organized for private purposes in shops or business premises, with a view to the sale of foreign goods.
Section B. Operational Procedures Related to Origin
Article 38. Certificate of Origin
1. In order for originating goods to qualify for preferential tariff treatment, the importer shall hold and submit, where required by the customs legislation of the importing Party, an original and valid Certificate of Origin, issued in writing on the basis of the format as set out in Section A (Certificate of Origin) of Annex 5 (Certificate of Origin and Declaration of Origin), at the time of importation.
2. The exporter of the good shall apply in writing to the authorized body of the exporting Party for the issuance of a Certificate of Origin, which shall be issued before or at the time of exportation.
3. The Certificate of Origin must be duly completed in English, covering one or more goods under one consignment.
4. The exporter of the good applying for a Certificate of Origin shall provide the commercial invoice, the origin application which contains the minimum information data required under its domestic legislation, and all necessary documents to prove the originating status of the good concerned as required by the competent authority or authorized body, and undertake to fulfill the other requirements as laid down under this Chapter.
5. The Certificate of Origin, as referred to in paragraph 1, shall be valid for one year from its date of issuance.
6. In the event of theft, loss or destruction of a Certificate of Origin, the exporter may apply in writing to the authorized body which issued it for a duplicate of the original, on the basis of the export documents in his possession. The duplicate issued in this manner shall bear in the Remarks box the word “CERTIFIED TRUE COPY of the original Certificate of Origin number_dated_”, for its validation period to count from that date.
Notwithstanding subparagraph 2, a Certificate of Origin may, under exceptional circumstances, be issued retrospectively subsequent to the exportation of the good if:
(a) it was not issued at the time of exportation because of errors, involuntary omissions or any other circumstances as may be deemed justified under the legislation of each Party, provided that the exporter provides all the necessary commercial documents and the export declaration endorsed by the customs authority of the exporting Party; or