Title
COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT BETWEEN THE REPUBLIC OF INDONESIA AND THE EUROPEAN UNION
Preamble
The Republic of Indonesia, hereinafter referred to as “Indonesia”, and The European Union, hereinafter referred to as “the Union”,
hereinafter individually referred to as a “Party” and jointly referred to as the “Parties”,
RECOGNISING their longstanding and strong partnership based on the common principles and values reflected in the Framework Agreement on Comprehensive Partnership and Cooperation between the European Community and its Member States, of the one part, and the Republic of Indonesia, of the other part, signed in Jakarta on 9 November 2009., and their important economic, trade and investment relationship;
DESIRING to further strengthen their relationship as part of and in a manner coherent with their overall relations, and convinced that this Agreement will create a new climate for the development of trade and investment between the Parties;
DETERMINED to strengthen their economic, trade, and investment relations in accordance with the objective of sustainable development, in its economic, social and environmental dimensions, and to promote trade and investment under this Agreement;
DESIRING to raise living standards, promote economic growth and stability, create new employment opportunities and improve the general welfare and, to this end, reaffirming the commitment of the Parties to promote trade and investment;
DESIRING to promote the competitiveness of their companies in their trade and investment relations;
CONVINCED that this Agreement will create an expanded and secure market for goods and services and a stable and predictable environment for investment, thus providing an opportunity to enhancing the competitiveness of their companies in global markets;
RECOGNISING the importance of transparency in international trade to the benefit of all stakeholders;
SEEKING to establish clear and mutually advantageous rules governing trade and investment between the Parties and to reduce or eliminate barriers thereto;
DETERMINED to address the particular challenges faced by small and medium-sized enterprises in contributing to the development of trade and investment, and to support their growth by enhancing their ability to participate in, and benefit from, the opportunities created by this Agreement;
REAFFIRMING their commitment to the Charter of the United Nations signed in San Francisco on 26 June 1945 and having regard to the principles articulated in the Universal Declaration of Human Rights adopted by the General Assembly of the United Nations on 10 December 1948;
BUILDING on their respective rights and obligations under the Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994, and other multilateral, regional and bilateral agreements and arrangements to which both Parties are a party,
HAVE AGREED as follows:
Body
Chapter 1. INITIAL PROVISIONS AND GENERAL DEFINITIONS
Article 1.1. Objectives
The objectives of this Agreement are to liberalise and facilitate trade and investment, as well as to promote a closer economic relationship between the Parties.
Article 1.2. Establishment of a Free Trade Area
The Parties hereby establish a free trade area in conformity with Article XXIV of GATT 1994 and Article V of GATS.
Article 1.3. General Definitions
For the purposes of this Agreement, and unless otherwise provided:
(a) "Agreement on Agriculture" means the Agreement on Agriculture in Annex 1A to the WTO Agreement;
(b) "agricultural good" means a product listed in Annex 1 to the Agreement on Agriculture;
(c) "Anti-dumping Agreement" means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement;
(d) "CPC" means the Provisional Central Product Classification (Statistical Papers Series M No.77, Department of International Economic and Social Affairs, Statistical Office of the United Nations, New York, 1991);
(e) "customs duty" means any duty or charge of any kind imposed on or in connection with the importation of a good, not including any:
(i) charge equivalent to an internal tax imposed consistently with Article 2.4 (National Treatment on Internal Taxation and Regulation)] of Chapter 2 (National Treatment and Market Access for Goods);
(ii) anti-dumping, special safeguard, countervailing or safeguard duty applied consistently with GATT 1994, the Anti-dumping Agreement, the Agreement on Agriculture, the SCM Agreement and the Safeguards Agreement, as appropriate; and
(iii) fee or other charge imposed consistently with Article 2.7 (Fees and formalities] of Chapter 2 (National Treatment and Market Access for Goods);
(f) "Customs Valuation Agreement" means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement;
(g) "days" means calendar days, including weekends and holidays;
(h) "DSU" means the Understanding on Rules and Procedures Governing the Settlement of Disputes in Annex 2 to the WTO Agreement;
(i) "existing" means in effect on the date of entry into force of this Agreement;
(j) "GATS" means the General Agreement on Trade in Services in Annex 1B to the WTO Agreement;
(k) "GATT 1994" means the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement;
(l) "good of a Party" means a domestic good as that is understood in GATT 1994, and includes originating goods of that Party;
(m) “Harmonized System” means the Harmonized Commodity Description and Coding System, including all legal notes and amendments thereto developed by the World Customs Organization (the “HS”);
(n) “chapters” and “headings” and “sub-headings” mean the chapters, the headings (four digit codes) and sub-headings (six digit codes) used in the nomenclature which makes up the Harmonized System;
(o) "juridical person" means any legal entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately owned or governmentally owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;
(p) "measure" means any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action, requirement, practice, or any other form;
(q) "measure of a Party" (1) means any measure adopted or maintained by:
(i) central, regional or local governments and authorities;
(ii) non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities; and
(iii) any entity which is acting on the instructions of or under the direction or the control of a Party with regard to the measure;
(r) "Member State" means a Member State of the European Union;
(s) "natural person of a Party" means for the European Union, a national of a Member State of the European Union (2), and for Indonesia, a national of Indonesia, in accordance with their respective applicable law;
(t) "originating" means qualifying as originating under the rules of origin set out in Chapter 3 (Rules of Origin and Origin Procedures);
(u) "Paris Agreement" means the Paris Agreement adopted by the Conference of the Parties to the United Nations Framework Convention on Climate Change, done at Paris on 12 December 2015;
(v) "person" means a natural person or a juridical person;
(w) "preferential tariff treatment" means the application of the customs duty under this Agreement to an originating good pursuant to Article 2.5 (Reduction or elimination of customs duties)] of Chapter 2 (National Treatment and Market Access for Goods]);
(x) "Safeguards Agreement" means the Agreement on Safeguards in Annex 1A to the WTO Agreement;
(y) "sanitary or phytosanitary measure" means any measure referred to in paragraph 1 of Annex A to the SPS Agreement;
(z) "SCM Agreement" means the Agreement on Subsidies and Countervailing Measures in Annex 1A to the WTO Agreement;
(aa) "service supplied in the exercise of governmental authority" means any service which is supplied neither on a commercial basis nor in competition with one or more service suppliers;
(bb) "service supplier" means a person that supplies or seeks to supply a service;
(cc) "SPS Agreement" means the Agreement on the Application of Sanitary and Phytosanitary Measures in Annex 1A to the WTO Agreement;
(dd) "TBT Agreement" means the Agreement on Technical Barriers to Trade in Annex 1 to the WTO Agreement;
(ee) "third country" means a country or territory outside the territorial scope of application of this Agreement, as set out in Article [X.9 (Territorial application)] of Chapter [X (Final Provisions)];
(ff) "TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property Rights in Annex 1C to the WTO Agreement;
(gg) "Vienna Convention on the Law of Treaties" means the Vienna Convention on the Law of Treaties done at Vienna on 23 May 1969;
(hh) "WTO" means the World Trade Organization; and
(ii) "WTO Agreement" means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994.
Chapter 2. NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS
Article 2.1. Objective
The Parties shall progressively and mutually liberalise trade in goods in accordance with the provisions of this Agreement.
Article 2.2. Scope
Except as otherwise provided in this Agreement, this Chapter applies to trade in goods between the Parties.
Article 2.3. Definitions
For the purposes of this Chapter, the following definitions shall apply:
"consular transactions" means the procedure of obtaining from a consul of the importing Party in the territory of the exporting Party, or in the territory of a third party, a consular invoice or a consular visa for a commercial invoice, certificate of origin, manifest, shipper’s export
declaration or any other customs documentation in connection with the importation of the good;
"import licensing procedure" 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 or bodies as a prior condition for importation into the territory of the importing Party;
"export licensing procedures" 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 or bodies as a prior condition for exportation from the territory of the exporting Party;
"originating good" means a good qualifying under the rules of origin set out in Chapter 3 (Concerning the Definition of the Concept of “Originating Products” and Methods of Administrative Cooperation); and
"staging category" means the timeframe for the reduction or elimination of customs duties ranging from 0 to 15 (fifteen) years, after which a good is free of customs duty (unless otherwise specified in Annex 2-A (Tariff elimination schedules).
Article 2.4. National Treatment on Internal Taxation and Regulation
Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of the GATT 1994, including its Notes and Supplementary Provisions. To this end, Article III of the GATT 1994 and its Notes and Supplementary Provisions are incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.5. Reduction or Elimination of Customs Duties
1. Except as otherwise provided for in this Agreement, each Party shall reduce or eliminate customs duties on goods originating in the other Party in accordance with its Schedule in Annex 2-A (Tariff elimination schedules).
2. For the purpose of paragraph 1, the base rate of customs duties shall be the one specified for each good in the Schedules in Annex 2-A (Tariff elimination schedules).
3. If a Party reduces its applied most favoured nation customs duty rate, that duty rate shall apply to originating goods of the other Party for as long as it is lower than the customs duty rate determined pursuant to its Schedule in Annex 2-A (Tariff elimination schedules).
4. Four years after the entry into force of this Agreement, on the request of a Party, the Parties shall consult to consider accelerating the reduction or elimination of customs duties set out in the Schedules in Annex 2-A (Tariff elimination schedules) or broadening the scope of tariff reduction or elimination under this Agreement. The Trade Committee may take a decision to amend Annex 2-A to accelerate or broaden the scope of, the tariff reduction or elimination. For greater certainty, an agreement between the Parties to accelerate or broaden the scope of the tariff reduction or elimination shall be in accordance with Article 25.1 (Amendments) of Chapter 25 (Final Provisions).
5. A Party may at any time accelerate unilaterally the reduction or elimination of customs duties on originating goods of the other Party set out in its Schedule in Annex 2-A (Tariff elimination schedules). A Party considering this shall inform the other Party as early as practicable before the new rate of import duty takes effect. This shall not preclude either Party from raising an import duty to the level established in its Schedule for the respective staging period following a unilateral reduction.
6. Except as otherwise provided in this Agreement, no Party shall adopt or increase customs duty set as base rate on an originating good of the other Party in a manner inconsistent with its schedule of tariff commitments in Annex 2-A (Tariff elimination schedules).
7. For greater certainty, the originating goods classified under the tariff lines indicated with "X" in Annex 2-A (Tariff elimination schedules) shall be excluded from any commitment of reduction or elimination of customs duties and commitment of negotiation referred to in this Article.
Article 2.6. Export Duties, Taxes or other Charges
1. No Party shall introduce or maintain any duty, tax or other charge of any kind imposed on, or in connection with, the exportation of a good to the other Party; or any internal tax or other charge on a good exported to the other Party that is in excess of the tax or charge that would be imposed on like goods when destined for domestic consumption.
2. Paragraph 1 shall not apply to:
(a) measures which are adopted or maintained prior to 13 July 2025 (1), except for goods subject to commitments in Annex 2-B;
(b) the continuation or renewal of measures referred to in point (i), to the extent it does not decrease the conformity with respect to the scope of goods covered by measures referred to in point (i); or
(c) future measures, with respect to goods obtained in mineral processing in the pre-smelting phase. (2)
3. Notwithstanding paragraph 1, if a Party applies measures other than those in paragraph 2, the applied duty on exports to the other Party shall be reduced by 50% (fifty percent). This reduction shall also apply to the export by investors of either Party which have invested in the other Party, regardless of the export destination.
4. Any continuation or renewal of the measures covered by paragraph 2 shall be notified by either Party to the other Party within 60 days prior to the adoption of the measure. Upon such notification, the notifying Party shall provide the other Party with opportunity to consult with respect to new measures under point (iii) in paragraph 2. Where exceptional and critical circumstances requiring immediate action prevent such notification of measures covered by point (iii) of paragraph 2, such notification shall be made as soon as possible.
5. If either Party applies a lower rate of duty, tax or other charge on, or in connection with, the exportation of a good, to any other third country and for as long as it is lower than the rate applied to the other party, that lower rate shall apply. For greater certainty, a Party may raise the rate of duty, tax or other charge on, or in connection with, the exportation of a good following a unilateral reduction.
6. At the request of either Party, or on an annual basis, the Trade Committee shall review any duties, taxes, or other charges of any kind imposed on, or in connection with, the exportation of goods to the territory of the other Party. The Trade Committee may take a decision to amend paragraph 2 of this Article.
7. Nothing in this Article shall prevent a Party from imposing on the exportation of a good a fee or charge that is permitted under Article 2.7 (Fees and Formalities).
Article 2.7. Fees and Formalities
1. Each Party shall ensure that fees and charges connected with importation and exportation shall be consistent with its rights and obligations under Article VIII of GATT 1994. No Party shall levy fees or other charges on or in connection with importation or exportation on an ad valorem basis.
2. Each Party shall promptly publish details of the fees and charges in connection with importation and exportation and, to the extent possible, make such information available on the internet, so as to enable governments, traders and other interested parties, to become acquainted with them.
3. No Party shall require consular transactions, including related fees and charges, in connection with the importation of any good of the other Party (3).
Article 2.8. Import and Export Restrictions
1. No Party shall adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, except in accordance with Article XI of GATT 1994, including its Notes and Supplementary Provisions. To this end, Article XI of the GATT 1994 and its Notes and Supplementary Provisions are incorporated into and made part of this Agreement, mutatis mutandis.
2. No Party shall adopt or maintain:
(a) export and import price requirements (4), except as permitted in enforcement of countervailing and antidumping duty orders and undertakings;
(b) the mandatory use of pre-shipment inspections as defined in the Agreement on Pre-shipment inspection contained in Annex 1A to the WTO Agreement, or any other inspection activity performed at destination, before customs clearance, by private companies on goods exempted from pre-shipment inspections for any third country.
Article 2.9. Import and Export Monopolies
1. No Party shall designate or maintain a designated import or export monopoly, unless delegated for public policy purposes (5), such as food security, for the trade of any good. For the purposes of this Article, import or export monopoly means the exclusive right or grant of authority by a Party to an entity to import or export of any good to the other Party.
2. For greater certainty, this Article is without prejudice to provisions in Chapter 8 (Trade in Service and Investment) and Schedules, and does not include a right that results from the grant of an intellectual property right.
Article 2.10. Transit
Article V of the GATT 1994 is hereby incorporated into this Agreement, mutatis mutandis.
Article 2.11. Origin Marking
1. Except as otherwise provided for in this Agreement, and where Indonesia requires a mark of origin on the importation of goods of the European Union, Indonesia shall accept the origin mark “Made in the EU” or the equivalent in a language according to Indonesia origin marking requirements under conditions that are no less favourable than those applied to marks of origin of Member States of the Union. Such acceptance shall be without prejudice to its rights in requiring information on the origin of imported goods.
2. For greater certainty, both Parties agree that the provisions of this article are not meant to confer origin to the products traded between them, which is a matter covered by the provisions of Chapter 3 ( Rules of Origin).
Article 2.12. Import Licensing Procedures
1. The Parties shall ensure that all import licensing procedures are neutral in application, and administered in a fair, equitable, non-discriminatory, transparent manner, and consistent with their commitments in Annex 2-A (Tariff elimination schedules).
2. Each Party shall adopt and administer any import licensing procedures in accordance with Articles 1 to 3 of the Agreement on Import Licensing Procedures. To this end, Articles 1 to 3 of the Agreement on Import Licensing Procedures are incorporated into and made part of this Agreement, mutatis mutandis.
3. A Party that institutes licensing procedures, or changes to existing licensing procedures, shall notify the other Party of such within 60 days of publication. The notification shall include the information specified in Article 5(2) of the Agreement on Import Licensing Procedures. A Party shall be deemed to be in compliance with this provision if it has notified the relevant import licensing procedure, or any modifications thereof, to the Committee on Import Licensing provided for in Article 4 of the Import Licensing Agreement, including the information specified in Article 5(2) of that Agreement.
Upon request of a Party, the other Party shall promptly provide the relevant information to those specified in Article 5(2) of the Agreement on Import Licensing Procedures, regarding any import licensing procedure that it has adopted or maintains, or changes to existing licensing procedures.
Each Party shall make publicly available, accessible via the internet:
all relevant rules, information, procedures and other conditions, including any exceptions thereto, for submitting and granting an import licence application;
a contact point or points from which interested persons can obtain further information on the conditions for obtaining an import licence; and
the administrative body or bodies to which an application for a licence or other relevant documentation must be submitted.
Where a Party has denied partially or completely an import licence application with respect to a good of the other Party, it shall, upon request of the applicant and promptly, no longer than 15 days, after receiving the request, provide the applicant with a written explanation of the reasons for the denial and, if applicable, the procedures for resubmission of an application; an applicant shall not be prevented from submitting another application solely on the basis of a previously rejected application. The applicant shall have the right of appeal or review through judicial, arbitral, or administrative tribunals or procedures that shall be independent of the agencies entrusted with the administrative enforcement, in accordance with respective Party’s laws and regulations.
Article ARTICLE 2.13
Export licensing procedures
Each Party shall publish any new export licensing procedure, or any modification to an existing export licensing procedure, in such a manner as to enable governments, traders and other interested parties to become acquainted with them. Such publication shall take place, whenever practicable, and no later than the date such procedure or modification takes effect.
The publication of export licensing procedures shall include the following information:
the texts of its export licensing procedures, or of any modifications it makes to those procedures, including a description of the goods subject to each licensing procedure, the process for applying for a license and any criteria an applicant must meet to be eligible to apply for a license and the administrative body or bodies to which an application or other relevant documentation should be submitted;
a contact point or points from which interested persons can obtain further information on the conditions for obtaining an export license.
Within 60 days after the date of entry into force of this Agreement, each Party shall notify the other Party of its existing export licensing procedures. A Party that institutes new export licensing procedures, or changes to existing licensing procedures, shall notify the other Party of such within 60 days of publication. The notification shall include the reference to the source(s) where the information required in paragraph 2 is published and include, where appropriate, the address of the relevant government Internet website(s).
Article ARTICLE 2.14
Exchange of Information/Data
For the purpose of monitoring the functioning of the Agreement and calculating preference utilisation rates, the Parties shall annually exchange import statistics for a period starting one year after the entry into force of this Agreement until 10 years after the tariff elimination is completed for all goods according to the Schedules in Annex 2-A (Tariff elimination schedules). Unless the Trade Committee decides otherwise, this period shall be automatically extended for five years, and thereafter this Committee may decide to subsequently extend it.
The exchange of import statistics shall cover data pertaining to the most recent year available, including value and, where applicable, volume, at the tariff line level for imports of goods of the other Party benefitting from preferential duty treatment under this Agreement and those that received non-preferential treatment.
Article ARTICLE 2.15
Specific measures concerning the management of preferential treatment
The Parties agree to co-operate in preventing, detecting and combating breaches of customs legislation, as defined in the Protocol on Mutual Administrative Assistance in Customs Matters, related to the preferential treatment granted under this Chapter, in accordance with their specific obligations under the Chapter on Rules of Origin and the Protocol on Mutual Administrative Assistance in Customs Matters.
Without prejudice to temporary suspension as provided for under the Chapter on Rules of Origin, a Party may, in accordance with the procedure laid down in paragraph 3, suspend, for a limited period of time, the relevant preferential tariff treatment of the goods concerned when:
that Party has made a finding, on the basis of objective, compelling and verifiable information, that systematic and large-scale breaches of customs legislation related to the preferential treatment granted under this Chapter, have been committed, and;