3. Paragraphs 1 and 2 do not apply to the measures set out in Annex 202.
4. In the event that a Party adopts or maintains a prohibition or restriction on the importation from or exportation to a non-Party of a good, no provision of this Agreement shall be construed to prevent the Party from:
(a) limiting or prohibiting the importation from the territory of the other Party of such good of that non-Party; or
(b) requiring as a condition of export of such good of the Party to the territory of the other Party, that the good not be re-exported to the non-Party, directly or indirectly, without being consumed in the territory of the other Party.
5. In the event that a Party adopts or maintains a prohibition or restriction on the importation of a good from a non-Party, on the request of either Party, the Parties shall consult with a view to avoiding undue interference with or distortion of pricing, marketing or distribution arrangements in the other Party.
6. Neither Party may, as a condition for engaging in importation or for the import of a good, require a person of the other Party to establish or maintain a contractual relationship with a distributor in its territory.
7. Nothing in paragraph 6 prevents a Party from requiring the designation of an agent for the purpose of facilitating communications between regulatory authorities of the Party and a person of the other Party.
8. For purposes of paragraph 6 "distributor" means a person of a Party who is responsible for the commercial distribution, concession or representation in the territory of that Party of goods of the other Party.
Article 208. Import Licensing
1. Neither Party may adopt or maintain a measure that is inconsistent with the Import Licensing Agreement.
2. Each Party shall notify the other Party of any existing import licensing procedures promptly after entry into force of this Agreement.
3. Each Party shall publish any new import licensing procedure and any modification to its existing import licensing procedures or list of products, whenever practicable, 21 days prior to the effective date of the requirement but in all events no later than such effective date.
4. Each Party shall notify the other Party of any other new import licensing procedures and any modification to its existing import licensing procedures within 60 days of publication. Such publication shall be in accordance with the procedures as set out in the Import Licensing Agreement.
5. Notification provided under paragraphs 2 and 4 shall:
(a) include the information specified in Article 5 of the Import Licensing Agreement; and
(b) be without prejudice as to whether the import licensing procedure is consistent with this Agreement.
Article 209. Administrative Fees and Formalities
1. Each Party shall ensure, in accordance with Article VIII:1 of the GATT 1994 that all fees and charges of whatever character (other than customs duties, charges equivalent to an internal tax or other internal charge applied consistently with Article III:2 of the GATT 1994, and antidumping and countervailing duties) imposed on or in connection with importation or exportation are limited to the approximate cost of services rendered and do not represent an indirect protection to domestic goods or a taxation of imports or exports for fiscal purposes.
2. Neither Party may require consular transactions, including related fees and charges, in connection with the importation of any good of the other Party.
3. Each Party shall make available and maintain through the Internet a current list of the fees and charges it imposes in connection with importation or exportation.
Article 210. Export Taxes
Except as provided in Annex 210, no Party may adopt or maintain any duty, tax or other charge on the export of any good to the territory of the other Party, unless such duty, tax or charge is also adopted or maintained on any such good when destined for
Article 211. Customs Valuation
The Customs Valuation Agreement and any successor Agreement shall govern the customs valuation rules applied by the Parties to their reciprocal trade.
Article 212. Distinctive Products
1. Colombia shall recognize "Canadian Whisky" and "Canadian Rye Whisky" as distinctive products of Canada. Accordingly, Colombia shall not permit the sale of any product as "Canadian Whisky" and "Canadian Rye Whisky", unless it has been manufactured in Canada in accordance with the laws and regulations of Canada governing the manufacture of "Canadian Whisky" and "Canadian Rye Whisky".
2. At the request of a Party, the Committee on Trade in Goods shall consider whether to recommend that the Parties amend the Agreement to provide additional protection in the manner set out in the domestic law of the other Party.
Section E. Agriculture
Article 213. Scope and Coverage
1. This Section applies to the measures adopted or maintained by either Party relating to agricultural goods.
2. For agricultural goods, in the event of any inconsistency between the provisions of this Section and the provisions of any other Section or Chapter of this Agreement, the provisions of this Section shall prevail to the extent of the inconsistency.
Article 214. Agricultural Export Subsidies
1. The Parties share the objective of the multilateral elimination of agricultural export subsidies and shall work together toward an agreement in the WTO to eliminate those subsidies and avoid their reintroduction in any form.
2. A Party shall not maintain, introduce or re-introduce agricultural export subsidies on any agricultural good originating in or shipped from its territory that are exported directly or indirectly to the territory of the other Party.
3. If either Party maintains, introduces or re-introduces an export subsidy on a product that is exported to the other Party, the Party applying the measure shall, at the request of the other Party, consult with a view to agreeing on specific measures that either Party may adopt to counter the effects of such export subsidy. Should agreement on specific measures not be reached within a period of 90 days following the initial request, or such period as agreed by the Parties, the importing Party may adopt measures to counter the effect of the export subsidy, including an increase in the rate of duty on such imports to the applied most-favoured-nation (MFN) tariff rate. The applied measures shall be removed by the importing Party upon the elimination of the export subsidy.
Article 215. State Trading Enterprises
1. The rights and obligations of the Parties with respect to state trading enterprises shall be governed by Article XVII of the GATT 1994 and the Understanding on the Interpretation of Article XVII of the GATT 1994, which are incorporated into and made part of this Agreement, mutatis mutandis.
2. The Parties agree to cooperate in the WTO negotiations to ensure transparency regarding the operation and maintenance of state trading enterprises.
Article 216. Domestic Support Measures for Agricultural Goods
1. The Parties agree to cooperate in the WTO agricultural negotiations in order to achieve a substantial reduction of the production and trade-distorting domestic support measures.
2. If either Party maintains, introduces or re-introduces a domestic support measure that the other Party considers to distort bilateral trade covered by this Agreement, the Party applying the measure shall, at the request of the other Party, consult with a view to avoiding the nullification and impairment on the concessions granted under this Agreement. Such consultations shall be deemed to satisfy the requirements of Article 2104 (Dispute Settlement - Consultations).
Article 217. Agricultural Safeguard Measures
1. Notwithstanding Article 203, Colombia may apply an agricultural safeguard measure in the form of an additional customs duty on an originating agricultural good listed in Annex 217, provided the conditions of this Article are fulfilled. The total customs duties applied on such good, including the agricultural safeguard measure, shall not exceed the lesser of:
(a) the applied MFN tariff rate at the time the measure is adopted; or
(b) the base rate set out in a Party's Schedules to Annex 203.
2. Colombia may not apply or maintain an agricultural safeguard measure on an originating good: (a) after the expiration of the tariff elimination period set out in Annex 203; or (b) that increases the duty on in-quota goods subject to a TRQ.
3. Colombia may apply an agricultural safeguard measure during any calendar year on an originating agricultural good only where the quantity of imports of the good during that year exceeds the trigger volume for that good, set out in Annex 217.
4. Colombia may not apply or maintain a safeguard measure pursuant to this Article and at the same time apply or maintain with respect to the same good: a) an emergency action pursuant to Chapter Seven (Emergency Action and Trade Remedies); or b) a measure pursuant to Article XIX of the GATT 1994 and the WTO Agreement on Safeguards .
5. Colombia shall implement an agricultural safeguard measure in a transparent manner. To this end, Colombia shall, in writing, notify Canada and provide all relevant information regarding the measure within 60 days of its application. Colombia shall consult with Canada on Canada's request regarding the application of the agricultural safeguard measure.
6. Colombia may maintain an agricultural safeguard measure only until the end of the calendar year in which it applies the measure.
7. Neither Party may apply duties under Article 5 of the WTO Agreement on Agriculture on goods of the other Party that are subject to tariff elimination under Annex 203. 8. For purposes of this Article and Annex 217, agricultural safeguard measure means a measure described in paragraph 1.
Article 218. Price Band System
Except as otherwise provided in this Agreement, Colombia may apply the PBS only with respect to the agricultural goods listed in Annex 218 and subject to any applicable conditions set out in Annex 218.
Article 219. Administration and Implementation of Tariff-rate Quotas
1. Colombia shall implement and administer its TRQs in accordance with Article XIII of the GATT 1994, and the Import Licensing Agreement.
2. Colombia shall ensure that:
(a) its procedures for administering its TRQs are transparent, made available to the public, timely, non-discriminatory, responsive to market conditions and minimally burdensome to trade;
(b) subject to subparagraph
(c), a person of a Party that fulfills Colombia's legal and administrative requirements for TRQs shall be eligible to apply and to be considered for an import license or an in-quota quantity allocation under Colombia's TRQs;
(c) it does not, under its TRQs:
(i) allocate any portion of an in-quota quantity to a producer or a producer's group,
(ii) condition access to an in-quota quantity on purchase of domestic production,
(iii) limit access to an in-quota quantity only to processors, or (iv) allocate any portion of an in-quota quantity to a distributor or a distributor's group;
(d) only national governments or state-enterprises administer its TRQs and that this administration is not delegated to other persons except as otherwise provided in this Agreement; and
(e) it allocates in-quota quantities under its TRQs in commercially viable shipping quantities and, to the maximum extent possible, in the amounts that importers request.
3. Colombia shall make every effort to administer its TRQs in a manner that allows importers to fully utilize them.
4. Colombia may not condition application for or use of an in-quota quantity allocation under a TRQ on the re-export of an agricultural good.
5. Colombia may not count food aid or other non-commercial shipments in determining whether an in-quota quantity under a TRQ has been filled.
6. Colombia shall consult with Canada on Canada's request regarding Colombia's administration of TRQs.
Section F. Institutional Provisions
Article 220. Committee on Trade In Goods
1. The Parties hereby establish a Committee on Trade in Goods, comprising representatives of each Party.
2. The Committee shall meet on the request of a Party or the Commission to consider matters arising under this Chapter, Chapter Three (Rules of Origin), Chapter Four (Origin Procedures and Trade Facilitation) or Chapter Seven (Emergency Action and Trade Remedies).
3. The Committee's functions shall include:
(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 Commission for its consideration;
(c) providing to the Committee on Trade-Related Cooperation advice and recommendations on technical assistance needs regarding matters relating to this Chapter, Chapter Three (Rules of Origin), Chapter Four (Origin Procedures and Trade Facilitation) or Chapter Seven (Emergency Action and Trade Remedies);
(d) reviewing any subsequent amendments to the Harmonized System, and consulting to resolve any inconsistencies between:
(i) subsequent amendments to Harmonized System 2007 and Annex 203, or
(ii) Annex 203 and national nomenclatures; and,
(e) consulting on and endeavoring to resolve any difference that may arise between the Parties on matters related to the classification of goods under the Harmonized System.
Article 221. Agricultural Sub-committee
1. At the request of a Party, the Parties shall establish a Sub-Committee on Agriculture comprising representatives of each Party. The Sub-Committee shall have the following functions:
(a) monitoring and promoting cooperation on the implementation and administration of Section E in a way that real access to agricultural products is ensured;
(b) providing a forum for the Parties to consult on issues resulting from the implementation and administration of this Agreement for agricultural goods;
(c) consulting on matters related to Section E in coordination with other committees, sub-committees and other working groups established in this Agreement;
(d) evaluating agricultural trade development under this Agreement, its impacts in the agricultural sector of each Party, the operation of the Agreement's tools, and recommending any necessary actions to the Committee on Trade in Goods;
(e) submitting to the Committee on Trade in Goods for its consideration any matter arising under this article;
(f) reporting to the Committee on Trade in Goods any other matter related to this Section; and
(g) undertaking any additional work that the Committee on Trade in Goods may assign.
3. The Sub-Committee shall meet within 60 days of a request by a Party or as otherwise agreed by the Parties. The meetings of the Sub-Committee shall be chaired by the representatives of the hosting Party of the meeting. The Sub-Committee shall inform the Committee on Trade in Goods of the results of its meetings.
4. All the decisions taken by the Sub-Committee shall be reached by consensus.
Section G. Definitions
Article 222. Definitions
For purposes of this Chapter:
AD Agreement means the WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994;
advertising films and recordings means recorded visual media or audio materials, consisting essentially of images and/or sound, showing the nature or operation of goods or services offered for sale or lease by a person established or resident in the territory of a Party, provided that such materials are of a kind suitable for exhibition to prospective customers but not for broadcast to the general public;
agricultural export subsidies means export subsidies as defined in Article 1(e) of the WTO Agreement on Agriculture, including any amendment to that definition in force for the Parties;
agricultural goods means those goods referred to in Article 2 of the WTO Agreement on Agriculture;
fixed component of the PBS means the External Common Tariff of the Andean Communities and is indicated as the base rate in Colombia's Tariff Schedule for Agricultural Goods, attached to Annex 203;
commercial samples of negligible value means commercial samples having a value, individually or in the aggregate as shipped, of not more than one U.S. dollar, or the equivalent amount in the currency of a Party, or so marked, torn, perforated or otherwise treated that they are unsuitable for sale or use except as commercial samples;
consular transactions means requirements that goods of a Party intended for export to the territory of the other Party must first be submitted for 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;
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;
customs duty includes any customs or import duty and a charge of any kind imposed in connection with the importation of a good, including any form of surtax or surcharge in connection with such importation, but does not include any:
(a) charge equivalent to an internal tax imposed consistently with Article III:2 of the GATT 1994, in respect of like, directly competitive or substitutable goods of the Party, or in respect of goods from which the imported good has been manufactured or produced in whole or in part;
(b) antidumping or countervailing duty that is applied pursuant to a Party's domestic law; or
(c) fee or other charge in connection with importation commensurate with the cost of services rendered;
duty-free means free of customs duty;
goods admitted for sports purposes means sports requisites for use in sports contests, demonstrations or training in the territory of the Party into whose territory such goods are temporarily admitted;
goods intended for display or demonstration includes their component parts, ancillary apparatus and accessories;
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;
Import Licensing Agreement means the WTO Agreement on Import Licensing Procedures;
NANDINA means the common nomenclature classification system of the Andean Community (Nomenclatura Comun de los Paises Miembros de la Comunidad Andina);
PBS means the price band system established by Decision 371 Sistema Andino de Franjas de Precios of the Andean Community on 26 November 1994, and its amendments;
printed advertising materials means those goods classified in Chapter 49 of the Harmonized System, including brochures, pamphlets, leaflets, trade catalogues, yearbooks published by trade associations, tourist promotional materials and posters, that are used to promote, publicize or advertise a good or service, are essentially intended to advertise a good or service, and are supplied free of charge;
SCM Agreement means the WTO Agreement on Subsidies and Countervailing Measures; and
TRQ means a tariff rate quota set out in Section C(iii) of Annex 203.
Chapter Three. Rules of Origin
Article 301. Originating Goods
Except as otherwise provided in this Chapter, a good shall originate in the territory of a Party where:
(a) the good is wholly obtained or produced entirely in the territory of one or both of the Parties, as defined in Article 318;
(b) the good fulfils the requirements set out for that good in Annex 301 as a result of production occurring entirely in the territory of one or both of the Parties;
(c) the good is produced entirely in the territory of one or both of the Parties, exclusively from originating materials; or
(d) except as provided in Annex 301 or except for a good of Chapter 1 through 24, heading 39.01 through 39.14 or Chapter 50 through 63 of the Harmonized System,
(i) the good is produced entirely in the territory of one or both of the Parties,
(ii) one or more of the non-originating materials used in the production of the good cannot satisfy the requirements set out in Annex 301 because both the good and the non-originating materials are classified in the same subheading, or heading that is not further subdivided into subheadings, and (iii) the value of the non-originating materials classified as or with the good does not exceed 55 per cent of the transaction value of the good, and the good satisfies all the other applicable requirements of this Chapter.
Article 302. Minimal Operations
Except for sets or assortments of goods referred to in Annex 301 or in Article 310, a good shall not be considered to be an originating good merely by reason of undergoing one or more of the following operations in the territory of a Party:
(a) packaging, re-packaging or breaking up for retail sale of the good;
(b) oiling or applying anti-rust paint or protective coatings to the good; or
(c) disassembly of a new good into its parts.
Article 303. Value Test
1. Except as provided in paragraph 2, where the applicable rule of origin in Annex 301 for the tariff provision under which a good is classified specifies a value test, the value test shall be satisfied provided the value of non-originating materials used in the production of the good does not exceed the percentage of the transaction value of the good set out in the rule of origin applicable to that good.
2. For purposes of a good of heading 87.01 through 87.08, at the choice of an exporter or a producer of such good, the value test shall be satisfied provided the value of non-originating materials used in the production of the good does not exceed the percentage of either the transaction value or the net cost of the good set out in the rule of origin applicable to that good.
3. The value of non-originating materials used by the producer in the production of a good shall not, for purposes of satisfying the value test under either paragraph 1 or 2, include the value of non-originating materials used to produce originating materials that are subsequently used in the production of the good.
4. For purposes of paragraph 3, "the value of non-originating materials" in paragraphs 1 and 2 does not include:
(a) the value of any non-originating materials used by another producer to produce an originating material that is subsequently acquired and used in the production of the good by the producer of the good; or
(b) the value of non-originating materials used by the producer to produce an originating intermediate material.
5. For purposes of calculating the net cost of a good under paragraph 2, the producer of the good may:
(a) calculate the total cost incurred with respect to all goods produced by that producer, subtract any sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, as well as non-allowable interest costs that are included in the total cost of all such goods, and then reasonably allocate the resulting net cost of those goods to the good;
(b) calculate the total cost incurred with respect to all goods produced by that producer, reasonably allocate the total cost to the good, and then subtract any sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs and non-allowable interest costs that are included in the portion of the total cost allocated to the good; or
(c) reasonably allocate each cost that forms part of the total cost incurred with respect to the good so that the aggregate of these costs does not include any sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, or non-allowable interest costs.
6. For purposes of calculating the net cost of a good under paragraph 2, the producer may average its calculation over its fiscal year using any one of the following categories, on the basis of either all motor vehicles in the category or only those motor vehicles in the category that are exported to the territory of the other Party:
(a) the same model line of motor vehicles in the same class of vehicles produced in the same plant in the territory of a Party;
(b) the same model line of motor vehicles produced in the same plant in the territory of a Party;
(c) the same model line of motor vehicles produced in the territory of a Party;
(d) the same class of motor vehicles produced in the same plant in the territory of a Party; or (e) any other category as the Parties may agree.