Article 2.12. Administrative Fees and Formalities
1. Each State Party shall ensure, in accordance with Article VIII (Fees and Formalities connected with Importation and Exportation) of GATT 1994, including its interpretative notes, that all fees and charges of whatever character (other than export taxes, customs duties, charges equivalent to an internal tax or other internal charge applied consistently with Article III(2) (National Treatment on Internal Taxation and Regulation) of GATT 1994, and anti-dumping and countervailing duties) imposed on, or in connection with importation or exportation of, goods are limited in amount to the approximate cost of services rendered, which shall not be calculated on an ad valorem basis, unless it has a fixed maximum fee, and do not represent an indirect protection to domestic goods or a taxation of imports or exports for fiscal purposes. Each State Party shall endeavour to phase out any ad valorem based fees and charges.
2. Each State Party shall make available online a current list of the fees and charges it imposes in connection with importation or exportation.
3. Each State Party shall periodically review its fees and charges, including consular fees applied on imports, with a view to either eliminating them, or reducing their number and diversity, where practicable.
Article 2.13. Import and Export Licensing
1. The State Parties shall introduce and administer any import or export licensing procedure in accordance with:
(a) Paragraphs 1 through 9 of Article 1 (General Provisions) of the Import Licensing Agreement;
(b) Article 2 (Automatic Import Licensing) of the Import Licensing Agreement; and
(c) Article 3 (Non-Automatic Import Licensing) of the Import Licensing Agreement.
To this end, the provisions referred to in subparagraphs (a), (b) and (c) are incorporated into and made part of this Agreement. The State Parties shall apply those provisions, mutatis mutandis, for any export licensing procedures.
2. A State Party shall only adopt or maintain licensing procedures as a condition for importation into its territory or exportation from its territory to another State Party when other appropriate procedures to achieve an administrative purpose are not reasonably available.
3. A State Party shall not adopt or maintain non-automatic import or export licensing procedures unless necessary to implement a measure that is consistent with this Agreement. A State Party adopting non-automatic licensing procedures shall indicate clearly the measure being implemented through such licensing procedure.
4. Each State Party shall respond within 60 (sixty) days to enquiries from another State Party regarding any licensing procedures which the State Party to which the request is addressed intends to adopt or has adopted or maintained, as well as the criteria for granting or allocating import or export licenses.
5. Promptly after this Agreement enters into force for a State Party, that State Party shall notify the other State Parties of its existing import licensing procedures, if any. The notification shall include the information specified in Article 5(2) (Notification) of the Import Licensing Agreement.
6. A State Party shall be deemed to be in compliance with paragraph 5 with respect to an existing import licensing procedure if:
(a) it has notified that procedure to the Committee on Import Licensing provided for in Article 4 (Institutions) of the Import Licensing Agreement together with the information specified in Article 5(2) (Notification) of that agreement; or
(b) in the most recent annual submission due before entry into force of this Agreement for that State Party to the Committee on Import Licensing in response to the annual questionnaire on import licensing procedures described in Article 7(3) (Review) of the Import Licensing Agreement, it has provided, with respect to that procedure, the information requested in that questionnaire.
7. Each State Party shall notify the other State Parties of any new import licensing procedures it adopts and any modifications it makes to its existing import licensing procedures, whenever possible, no later than 60 (sixty) days before the new procedure or modification takes effect. In no case shall a State Party provide such notification later than 60 (sixty) days following the date of its publication. A State Party that notifies a new import licensing procedure or a modification to an existing import licensing procedure to the Committee on Import Licensing in accordance with Article 5(1), 5(2) and 5(3) (Notification) of the Import Licensing Agreement shall be deemed to have complied with this requirement.
8. Where a State Party has denied an import license application with respect to a good of another State Party, it shall, on request of the applicant and within a reasonable period after receiving the request, provide the applicant with a written explanation of the reason(s) for the denial.
Article 2.14. Technical Consultations
1. Each Party shall designate and notify a contact point to facilitate communications amongst the Parties on any matter covered by this Chapter.
2. A Party may request technical consultations to discuss any matter arising under this Chapter, by making a request to another Party through the contact points referred to in paragraph 1. The
request shall identify the reasons for the request, including a description of the Party's concerns and an indication of the provisions of this Chapter to which the concerns relate.
3. Within a reasonable period of time after the receipt of a request under paragraph 2, the Party which has received the request shall provide a reply. If still deemed necessary, within 30 (thirty) days of the receipt of the reply, the Parties shall discuss, in person or via electronic means, the matter identified in the request. If the Parties choose to meet in person, the meeting shall take place in such locations and through such means as the Parties mutually decide.
4. Unless the Parties that participate in the technical consultations agree otherwise, the discussions and any information exchanged in the course of the consultations shall be confidential.
5. This Article refers to technical consultations and is without prejudice to a Party's rights and obligations under Chapter 18 (Dispute Settlement). For greater certainty, a request for technical consultations under this Article shall not be deemed to be a request for consultation under Chapter 18 (Dispute Settlement).
Article 2.15. Subcommittee on Trade In Goods and Rules of Origin
1. The Parties hereby establish a Subcommittee on Trade in Goods and Rules of Origin (hereinafter referred to as Subcommittee in this Chapter), composed of government representatives of each State Party.
2. The Subcommittee shall meet as necessary at the request of a Party or the Joint Committee to consider matters arising under this Chapter and Chapter 3 (Rules of Origin).
3. The Subcommittee’s functions shall include:
(a) reviewing and monitoring the implementation and administration of the chapters referred to above;
(b) promoting trade in goods between the Parties, including:
(i) addressing non-tariff measures covered under the chapters referred to in paragraph 2;
(ii) consulting on broadening and accelerating tariff elimination under this Agreement; or
(iii) proposing any modification to the product specific rules of origin;
(c) reviewing the future amendments to the HS to ensure that each Party's obligations under this Agreement are not altered;
(d) consulting on and endeavoring to resolve any differences that may arise between the Parties on matters related to:
(i) the classification of goods under the HS; or
(ii) Annex 2-A and national nomenclatures.
(e) making recommendations and endeavouring to resolve any issue relating to the chapters referred to in paragraph 2;
(f) undertaking any additional work that the Joint Committee may assign to it;
(g) ensuring the proper functioning of the Rules of Origin Chapter and examining all issues arising thereunder;
(h) agreeing to hold ad hoc meetings on any aspect related to the implementation of the chapters referred to in paragraph 2, including their annexes and appendices; and
(i) preparing and submitting reports on modifications to the Chapter 3 (Rules of Origin), to be considered by the Joint Committee.
4. The Subcommittee shall consult, as appropriate, with other subcommittees, working groups and other bodies established under this Agreement when addressing issues of relevance to those subcommittees.
Chapter 3. RULES OF ORIGIN
Section A. GENERAL PROVISIONS
Article 3.1. Definitions
For the purposes of this Chapter:
(a) "chapter", "heading" and "subheading" means a chapter (two-digit code), heading (four-digit code) or subheading (six-digit code) of the Harmonized System (HS);
(b) "classified" refers to the classification of a product or material under a particular chapter, heading or subheading;
(c) "competent authority" means:
(i) for Singapore: Singapore Customs;
(ii) for Argentina: Secretaría de Comercio or its successors;
(iii) for Brazil: Secretaria Especial da Receita Federal do Brasil and Secretaria de Comércio Exterior or its successors;
(iv) for Paraguay: Ministerio de Industria y Comercio or its successors;
(v) for Uruguay: Ministerio de Economía y Finanzas Política Comercial or its successors;
(d) "custom value" means the value determined in accordance with the Customs Valuation Agreement;
(e) "ex-works price" means the price paid for a product to the manufacturer in the State Party where the last working or processing was carried out, in accordance with the international commercial terms "incoterms", provided the price includes the value of all the materials used, direct and indirect costs, and profit minus any internal taxes which are, or may be, repaid when the product obtained is exported;
(f) "goods" means both materials and products;
(g) "manufacture" means working or processing, including assembling;
(h) "material" means any ingredient, raw material, component or part used in the manufacture of a product;
(i) "product" means the manufactured or finished product, even if it is intended for later use in another manufacturing operation;
(j) "value of non-originating materials" means the custom value at the time of importation of the non-originating materials used including the freight and insurance to the place of import in a State Party, or, if this is not known and cannot be ascertained, the first ascertainable price paid for the materials in a State Party, which may exclude all costs incurred in transporting the
non-originating materials within a Party such as freight, insurance and packing costs as well as any other known and ascertainable cost incurred there.
Section B. CONCEPT OF "ORIGINATING PRODUCTS"
Article 3.2. General Requirements
For the purposes of this Agreement, a product shall be considered as originating in a Party if:
(a) it has been wholly obtained in the territory of a Party, in accordance with Article 3.3 (Wholly obtained products);
(b) it incorporates non-originating materials provided that they have undergone sufficient working or processing in the territory of a Party, in accordance with Article 3.4 (Sufficient working or processing); or
(c) it has been produced entirely in the territory of one or both of the Parties, exclusively from originating materials.
Article 3.3. Wholly Obtained Products
The following products shall be considered as wholly obtained in the territory of a Party:
(a) minerals and other naturally occurring substances extracted or taken from its soil, subsoil waters, seabed or beneath the seabed there;
(b) plants and vegetable products grown and harvested there;
(c) live animals born and raised there;
(d) products from live animals born and raised there;
(e) products from slaughtered animals born and raised there;
(f) products obtained by hunting, trapping, or fishing conducted there;
(g) products of aquaculture where the fish, crustaceans, molluscs and other aquatic invertebrates are born or raised there;
(h) products, other than a fish, crustacean, mollusc and other marine life taken by a State Party or a person of a State Party from the Area [1], provided that State Party or the person of that State Party has the exclusive right to exploit it in accordance with international law, including the UNCLOS;
(i) a fish, crustacean, mollusc and other marine life taken from the high seas:
(i) by vessels that are registered, listed or recorded and entitled to fly the flag of that State Party; or
(ii) by chartered vessels where the fishing licenses are issued by the same State Party whose persons are chartering the vessel;
and that State Party has the right to exploit those waters in accordance with international law, including UNCLOS;
(j) a good, referred to in subparagraph (i), obtained or produced on board of a factory ship, provided that:
(i) the factory ship is registered, listed or recorded and entitled to fly the flag of that State Party; or
(ii) in the case of a chartered factory ship, the fishing license is issued by the same State Party whose persons are chartering the factory ship;
(k) goods extracted from "the Area" where it has exclusive exploitation rights, in accordance with UNCLOS;
(l) waste and scrap resulting from manufacturing operations conducted there;
(m) used products collected there fit only for the recovery of raw materials and not for their original purpose; or
(n) products manufactured in a Party exclusively from materials listed in subparagraphs (a) to (m).
Article 3.4. Sufficient Working or Processing
1. A product obtained from non-originating materials shall be considered to have undergone sufficient working or processing if the applicable product-specific rule of Annex 3-B (Product- specific Rules) is fulfilled.
2. Singapore shall give due consideration to any request from MERCOSUR for Paraguay to benefit from more flexible rules than those set in Annex 3-B (Product-specific Rules), for manufactured products obtained from non-originating materials. Such consideration shall be given taking into account the following parameters:
a) the request shall have a clear implementation period;
b) the request shall be made up to 15 (fifteen) years after the entry into force of this agreement; and
c) the request shall be limited to an additional 5 (five) percentage points of maximum non- originating materials on a value rule, when applicable.
3. Notwithstanding paragraph 1, the operations defined in Article 3.5 (Insufficient working or processing) are considered as insufficient to obtain originating status.
4. The product-specific rules referred to in paragraph 1 indicate the working or processing which must be carried out on non-originating materials used in manufacturing and concern only such materials. It follows that if a product, which has acquired originating status in a Party in accordance with paragraph 1, is further processed in that Party and used as material in the manufacture of another product, no account shall be taken of the non-originating components of that material.
5. Notwithstanding paragraph 1, non-originating materials which do not fulfil the conditions set out in Annex 3-B (Product-specific Rules) may be used, provided that:
(a) their total value does not exceed 10% of the ex-works price of a product; and
(b) no maximum value or weight of non-originating materials set out in Annex 3-B (Product- specific Rules) is exceeded through the application of this paragraph.
This paragraph shall not apply to products falling within Chapters 50 to 63 of the Harmonized System.
6. Notwithstanding paragraph 1, tolerances stipulated in Notes 6 and 7 of Annex 3-A (Introductory Notes) shall apply for products falling within Chapters 50 to 63 of the Harmonized System.
Article 3.5. Insufficient Working or Processing
1. Without prejudice to paragraph 3, the following operations shall be considered as insufficient working or processing to confer the status of originating products, whether or not the requirements of Article 3.4 (Sufficient working or processing) are satisfied:
(a) preserving operations to ensure that a product retains its condition during transport and storage, such as freezing or thawing;
(b) changes of packaging and breaking-up and assembly of packaging;
(c) washing, cleaning, removal of dust, oxide, oil, paint or other coverings;
(d) ironing or pressing of textiles or textile products;
(e) simple painting and polishing;
(f) husking, partial or total bleaching, polishing, and glazing of cereals and rice;
(g) colouring of sugar or forming sugar lumps;
(h) peeling and removal of stones, cores, pips and shells from fruits, nuts and vegetables;
(i) sharpening, simple grinding or simple cutting;
(j) sifting, screening, sorting, classifying, grading, matching;
(k) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;
(l) simple addition of water or dilution or dehydratation or denaturation of products;
(m) affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging;
(n) simple mixing of products, whether or not of different kinds;
(o) simple assembly of parts of articles to constitute a complete article or disassembly of products into parts; or
(p) slaughter of animals.
2. For the purposes of paragraph 1, "simple" describes operations or processes which need neither special skills nor machines, apparatus or equipment especially produced or installed to carry out the operation or process.
3. All operations or processes carried out in a Party on a product shall be taken into account when determining whether these operations or processes are considered as insufficient working or processing.
Article 3.8. Packaging Materials, Packing Materials and Containers
1. Each Party shall provide that if a product is subject to a maximum value of the non- originating materials requirement, the value of the packaging materials and containers in which the product is packaged for retail sale, if classified with the product, in accordance with Rule 5(b) of the General Rules for the Interpretation of the Harmonized System, shall be taken into account as originating or non-originating, as the case may be, in calculating the maximum value of the non- originating materials of the product. For other requirements, packaging materials and containers shall be disregarded in determining the origin of that product.
2. Packing materials and containers for shipment shall be disregarded in determining the origin of that product.
Article 3.9. Accessories, Spare Parts and Tools
Accessories, spare parts and tools dispatched with a piece of equipment, machine, apparatus or vehicle, which are part of the normal equipment and included in the price thereof or which are not separately invoiced, shall be regarded as one with the piece of equipment, machine, apparatus or vehicle in question.
Article 3.10. Neutral Elements
In order to determine whether a product originates in a Party, it shall not be necessary to determine the origin of the following which might be used in its manufacture:
(a) energy and fuel;
(b) plant and equipment;
(c) machines and tools; and
(d) other goods which do not enter, and which are not intended to enter, into the final composition of the product.
Article 3.11. Accounting Segregation
1. If originating and non-originating fungible materials are used in the working or processing of a product, the determination of whether the materials used are originating may be determined on the basis of an accounting segregation system without keeping the materials in separate stocks.
2. For the purposes of paragraph 1, "fungible materials" means materials that are of the same kind and commercial quality, with the same technical and physical characteristics, which cannot be distinguished from one another once they are incorporated into the finished product.
3. The accounting segregation system used on the basis of the general accounting principles applicable in the Parties, depending on where the product is manufactured, must ensure that no more final products receive originating status than would have been the case if the materials had been physically segregated.
4. A producer using an accounting segregation system must keep records of the operation of the system that are necessary for the respective customs authority to verify compliance with the provisions of this Chapter.
Article 3.12. Sets
Sets, as defined in Rule 3 of the General Rules for the Interpretation of the Harmonized System, shall be regarded as originating when all component products are originating. Nevertheless, when a set is composed of originating and non-originating products, the set as a whole shall be regarded as originating, provided that the value of the non-originating products does not exceed 15% per cent of the ex-works price of the set.
Section C. TERRITORIAL REQUIREMENTS
Article 3.13. Principle of Territoriality
1. The conditions for acquiring originating status set out in the provisions of Section B (Concept of "originating products") must be fulfilled without any interruption in a Party.
2. Notwithstanding paragraph 1, if an originating product is returned to the exporting Party after having been exported to a non-Party without having undergone any operation there, beyond those necessary to preserve it in good condition, that product shall retain its originating status.