Title Agreement between Japan and the Republic of Singapore for a New-Age Economic Partnership

Preamble

Japan and the Republic of Singapore (hereinafter referred to in this Agreement as "the Parties"),

Conscious of their warm relations and strong economic and political ties, including shared perceptions on various issues, that have developed through many years of fruitful and mutually beneficial co-operation;

Recognising that a dynamic and rapidly changing global environment brought about by globalisation and technological progress presents many new economic and strategic challenges and opportunities to the Parties;

Acknowledging that encouraging innovation and competition and improving their attractiveness to capital and human resources can enhance their ability to respond to such new challenges and opportunities;

Recognising that the economic partnership of the Parties would create larger and new markets, and would improve their economic efficiency and consumer welfare, enhancing the attractiveness and vibrancy of their markets, and expanding trade and investment not only between them but also in the region;

Reaffirming that such partnership will provide a useful framework for enhanced regulatory co-operation between the Parties to meet new challenges posed by emerging market developments and to improve their market infrastructure;

Bearing in mind their rights and obligations under other international agreements to which they are parties, in particular those of the Marrakesh Agreement Establishing the World Trade Organization (hereinafter referred to in this Agreement as "the WTO Agreement");

Reaffirming the importance of the multilateral trading system embodied by the World Trade Organization (hereinafter referred to in this Agreement as "the WTO");

Recognising the catalytic role which regional and bilateral trade agreements that are consistent with the rules of the WTO can play in accelerating global and regional trade and investment liberalisation and rule-making;

Realising that enhancing economic ties between the Parties would strengthen Japan's involvement in Southeast Asia;

Observing in particular that such ties would help catalyse trade and investment liberalisation in Asia-Pacific;

Convinced that stronger economic linkages between them would provide greater opportunities, larger economies of scale and a more predictable environment for economic activities not only for Japanese and Singapore businesses but also for other businesses in Asia;

Determined to create a legal framework for an economic partnership between the Parties;

HAVE AGREED as follows:

Body

Chapter 1. General Provisions

Article 1. Objectives

The objectives of this Agreement are:
(a) to facilitate, promote, liberalise and provide a stable and predictable environment for economic activity between the Parties through such means as:
(i) reducing or eliminating customs duties and other barriers to trade in goods between the Parties;
(ii) improving customs clearance procedures with a view to facilitating bilateral trade in goods;
(iii) promoting paperless trading between the Parties;
(iv) facilitating the mutual recognition of the results of conformity assessment procedures for products or processes; (v) removing barriers to trade in services between the Parties;
(vi) mutually enhancing investment opportunities and strengthening protection for investors and investments;
(vii) easing the movement of business people including professionals;
(viii) developing co-operation between the Parties in the field of intellectual property;
(ix) enhancing opportunities in the government procurement market; and
(x) encouraging effective control of and promoting co-operation in the field of anti competitive activities; and
(b) to establish a co-operative framework for further strengthening the economic relations between the Parties through such means as:
(i) promoting regulatory co-operation in the field of financial services, facilitating development of financial markets, including capital markets in the Parties and in Asia,and improving the financial market infrastructure of the Parties;
(ii) promoting the development and use of information and communications technology(hereinafter referred to in this Agreement as "ICT") and ICT-related services;
(iii) developing and encouraging co-operation in the field of science and technology;
(iv) developing and encouraging co-operation in the field of human resource development;
(v) promoting trade and investment activities of private enterprises of the Parties through facilitating their exchanges and collaboration;
(vi) promoting, particularly, trade and investment activities of small and medium enterprises of the Parties through facilitating their close co-operation; (vii) developing and encouraging co-operation in the field of broadcasting; and (viii) promoting and developing tourism in the Parties.

Article 2. Transparency

1. Each Party shall promptly make public, or otherwise make publicly available, its laws, regulations,administrative procedures and administrative rulings and judicial decisions of general application as well as international agreements which pertain to or affect the operation of this Agreement. 
2. Each Party shall, upon request by the other Party,promptly respond to specific questions from, and provide information to, the other Party with respect to matters referred to in paragraph 1 above.

Article 3. Confidential Information

1. Nothing in this Agreement shall be construed to require a Party to provide confidential information, the disclosure of which would impede law enforcement, or otherwise be contrary to the public interest, or which would prejudice legitimate commercial interests of particular enterprises, public or private.
2. Nothing in this Agreement shall be construed to require a Party to provide information relating to the affairs and accounts of customers of financial institutions.
3. Each Party shall, in accordance with its laws and regulations, maintain the confidentiality of information provided in confidence by the other Party pursuant to this Agreement, including business-confidential information.

Article 4. Security and General Exceptions

1. Nothing in this Agreement shall be construed:

(a) to require a Party to furnish any information the disclosure of which it considers contrary to its essential security interests;
(b) to prevent a Party from taking any action which it considers necessary for the protection of its essential security interests:
(i) relating to fissionable and fusionable materials or the materials from which they are derived;
(ii) relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment;
(iii) relating to the supply of services as carried out directly or indirectly for the purpose of provisioning a military establishment;
(iv) relating to the procurement of arms,ammunition or war materials, or to procurement indispensable for national security or for national defence purposes;or
(v) taken in time of war or other emergency within that Party or in international relations; or
(c) to prevent a Party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.
2. In the application of paragraph 1 above, the relevant interpretations and operation of the WTO Agreement shall,where appropriate, be taken into account.
3. Nothing in this Agreement shall be construed to prevent a Party from taking any action necessary to protect communications infrastructure of critical importance from unlawful acts against such infrastructure.

Article 5. Taxation

1. Unless otherwise provided for in this Agreement, its provisions shall not apply to any taxation measures.
2. Articles 2, 3 and 4 above shall apply to taxation measures, to the extent that the provisions of this Agreement are applicable to such taxation measures.

Article 6. Relation to other Agreements

1. In the event of any inconsistency between this Agreement and any other agreement to which both Parties are parties, the Parties shall immediately consult with each other with a view to finding a mutually satisfactory solution, taking into consideration general principles of international law.
2. For the purposes of this Agreement, references to articles in the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement (hereinafter referred to in this Agreement as "GATT 1994") include the interpretative notes, where applicable.

Article 7. Implementing Agreement

The Parties shall conclude a separate agreement setting forth the details and procedures for the implementation of this Agreement (hereinafter referred to in this Agreement as "the Implementing Agreement").

Article 8. Supervisory Committee

1. A Supervisory Committee shall be established to ensure the proper implementation of this Agreement, to review the economic relationship and partnership between the Parties,and to consider the necessity of amending this Agreement for furthering its objectives.
2. The functions of the Supervisory Committee shall include:
(a) reviewing the implementation of this Agreement;
(b) discussing any issues concerning trade-related and investment-related measures which are of interest to the Parties;
(c) encouraging each other to take appropriate measures which will lead to significant improvement of business environment between the Parties;
(d) considering and recommending further liberalisation and facilitation of trade in goods and services, and investment; 
(e) considering and recommending ways of furthering the objectives of this Agreement through more extensive co-operation; and (f) considering and recommending, at any time and whether or not in the context of the general review provided for in Article 10, any amendment to this Agreement or modification to the commitments herein.
3. Where there are any amendments to the provisions of the WTO Agreement on which provisions of this Agreement are based, the Parties shall, through the Supervisory Committee,consider the possibility of incorporating such amendments to this Agreement.
4. The Supervisory Committee:
(a) shall be composed of representatives of the Parties;
(b) shall be co-chaired by Ministers or senior officials of the Parties as may be delegated by them for this purpose; and (c) may establish and delegate responsibilities to working groups.
5. To promote dialogue between the government, academia and business communities of the Parties, for the purpose of developing and enhancing the economic partnership between the Parties, the working groups may, where necessary,invite academics and business persons with the relevant expertise to participate in the discussions of the working groups.
6. The Supervisory Committee shall convene once a year in regular session alternately in each Party. Special meetings of the Supervisory Committee shall also convene,within 30 days, at the request of either Party.

Article 9. Communications

Each Party shall designate a contact point to facilitate communications between the Parties on any matter relating to this Agreement.

Article 10. General Review

The Parties shall undertake a general review of the operation of this Agreement in 2007 and every five years thereafter.

Section CHAPTER 2. Trade In Goods

Article 11. Definitions Under Chapter 2

For the purposes of this Chapter:
(a) the term "originating goods of the other Party"means goods of the other Party which are treated as originating goods in accordance with Chapter3;
(b) the term "other duties or charges" means those provided for in sub-paragraph (b) of paragraph 1 of Article II of GATT 1994;
(c) the term "customs value of goods" means the value of goods for the purposes of levying ad valore mcustoms duties on imported goods;
(d) the term "transition period" means the period of 10 years immediately following the entry into force of this Agreement;
(e) the term "serious injury" means a significant overall impairment in the position of a domestic industry;
(f) the term "threat of serious injury" means serious injury that, on the basis of facts and not merely on allegation, conjecture or remote possibility,is clearly imminent; and
(g) the term "domestic industry" means the producers as a whole of the like or directly competitive good operating in the territory of a Party, or those whose collective output of the like or directly competitive good constitutes a major proportion of the total domestic production of the good.

Article 12. Classification of Goods

The classification of goods in trade between the Parties shall be in conformity with the Harmonized Commodity Description and Coding System (hereinafter referred to in this Agreement as "the Harmonized System").

Article 13. National Treatment Under Chapter 2

Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994.

Article 14. Elimination of Customs Duties

1. Each Party shall eliminate its customs duties on goods of the other Party in accordance with its Schedule in Annex I. The preferential tariff treatment shall be accorded only to originating goods of the other Party whose importation meets the consignment criteria provided for in Article 27.
2. On the request of either Party, the Parties shall consult to consider:
(a) accelerating the elimination of customs duties on goods as set out in the Schedules in Annex I; or (b) scheduling the elimination of customs duties on goods that are not yet set out in the Schedules in Annex I.
3. Any agreement for the further liberalisation of trade in goods reached as a result of consultations pursuant to paragraph 2 above shall be reflected in Annex I.
4. Each Party shall eliminate other duties or charges of any kind imposed on or in connection with the importation of goods of the other Party, if any. Neither Party shall increase or introduce other duties or charges of any kind imposed on or in connection with the importation of goods of the other Party.
5. Nothing in this Article shall prevent a Party from imposing, at any time, on the importation of any goods of the other Party: (a) a charge equivalent to an internal tax imposed consistently with the provisions of paragraph 2 of Article III of GATT 1994 in respect of the like domestic product or in respect of an article from which the imported product has been manufactured or produced in whole or in part; (b) any anti-dumping or countervailing duty applied consistently with the provisions of Article VI of GATT 1994, the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 and the Agreement on Subsidies and Countervailing Measures in Annex 1A to the WTO Agreement; and (c) fees or other charges commensurate with the cost of services rendered.

Article 15. Customs Valuation

The Parties shall apply the provisions of Part I of the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement (hereinafter referred to in this Agreement as "the Agreement on Customs Valuation") for the purposes of determining the customs value of goods traded between the Parties.

Article 16. Export Duties

Neither Party shall adopt or maintain any duties on goods exported from its territory into the territory of the other Party.

Article 17. Non-tariff Measures

Each Party shall:
(a) not institute or maintain any non-tariff measures 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 which are inconsistent with its obligations under the WTO Agreement; and
(b) ensure the transparency of its non-tariff measures permitted under paragraph (a) above and their full compliance with its obligations under the WTO Agreement with a view to minimising possible distortion to trade to the maximum extent possible.

Article 18. Emergency Measures

1. Subject to the provisions of this Article, each Party may, only during the transition period and to the minimum extent necessary to prevent or remedy the injury and to facilitate adjustment:
(a) suspend the further reduction of any rate of customs duty on the good provided for in thisChapter; or
(b) increase the rate of customs duty on the good to a level not to exceed the lesser of:
(i) the most-favoured-nation applied rate of customs duty in effect at the time when the measure set out in this paragraph is taken;and
(ii) the most-favoured-nation applied rate of customs duty in effect on the day immediately preceding the date of entry into force of this Agreement; if an originating good of the other Party, which is accorded the preferential tariff treatment provided for in Article 14, as a result of the reduction or elimination of a customs duty, is being imported into the territory of the former Party in such increased quantities, in absolute terms, and under such conditions that the imports of that originating good alone constitute a substantial cause of serious injury, or threat thereof, to a domestic industry of the former Party.
2. A Party may take a measure set out in paragraph 1 above only after an investigation has been carried out by the competent authorities of that Party in accordance with the same procedures as those provided for in Article 3 and paragraph 2 of Article 4 of the Agreement on Safeguards in Annex 1A to the WTO Agreement (hereinafter referred to in this Chapter as "the Agreement on Safeguards"). The investigation shall in all cases be completed within one year following its date of institution.
3. The following conditions and limitations shall apply to the taking of a measure pursuant to paragraph 1 of this Article:
(a) a Party shall immediately deliver a written notice to the other Party upon:
(i) initiating an investigatory process relating to serious injury, or threat thereof, and the reasons for it;
(ii) making a finding of serious injury, or threat thereof, caused by increased imports;and
(iii) taking a decision to apply such a measure;
(b) in making the notification referred to in subparagraph (a) above, the Party proposing to apply a measure shall provide the other Party with all pertinent information, which shall include evidence of serious injury or threat thereof caused by the increased imports, a precise description of the good involved and the proposed measure, the proposed date of introduction of the measure and its expected duration;
(c) a Party proposing to apply a measure shall provide adequate opportunity for prior consultations with the other Party with a view to reviewing the information arising from the investigation, exchanging views on the measure and reaching an agreement on compensation set out in paragraph 4 below. The Parties shall, in such consultations, review, inter alia, the information provided pursuant to sub-paragraph (b) above, to determine: (i) whether the provisions of this Article have been complied with;
(ii) whether any proposed measure should betaken; and
(iii) whether any proposed measure would operate so as to constitute an unnecessary obstacle to trade between the Parties;
(d) no measure shall be maintained except to the extent and for such time as may be necessary to prevent or remedy serious injury and to facilitate adjustment provided that such time shall not exceed a period of one year. In very exceptional circumstances, after the prior consultations referred to in sub-paragraph (c)above, a measure may be maintained for up to a total maximum period of three years. A Party taking such measure shall present to the other Party a schedule leading to its progressive elimination;
(e) no measure shall be applied again to the import of a particular originating good which has been subject to the measure during the transition period; and
(f) upon the termination of the measure, the rate of customs duty shall be the rate which would have been in effect but for the measure.
4. A Party proposing to apply a measure set out inparagraph 1 of this Article shall provide to the otherParty mutually agreed adequate means of trade compensationin the form of concessions of customs duties whose levels are substantially equivalent to the value of the additionalduties expected to result from the measure. If the Parties are unable to agree on the compensation within 30 days ofthe commencement of the consultations pursuant to subparagraph (c) of paragraph 3 above, the Party against whoseoriginating good the measure is taken shall be free tosuspend the application of concessions of customs dutiesunder this Agreement, which are substantially equivalent tothe measure applied under paragraph 1 of this Article. The Party exercising the right of suspension may suspend theapplication of concessions of customs duties only for theminimum period necessary to achieve the substantiallyequivalent effects.
5. Nothing in this Chapter shall prevent a Party fromapplying safeguard measures to a good being imported tothat Party irrespective of its source, including such agood being imported from the other Party, unless suchmeasures are inconsistent with Article XIX of GATT 1994 and the Agreement on Safeguards.
6. Each Party shall ensure the consistent, impartial andreasonable administration of its laws, regulations anddecisions governing proceedings of the measure.
7. Each Party shall, to the extent provided by its lawsand regulations, maintain judicial tribunals or proceduresfor the purpose of the prompt review of administrativeactions relating to measures set out in paragraph 1 of thisArticle. Such tribunals or procedures shall be independentof the authorities responsible for the determination of themeasure in question. 8. Each Party shall adopt or maintain equitable, timely,transparent and effective procedures relating to themeasure.

Article 19. General Exceptions Under Chapter 2

1. Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination against the other Party, or a disguised restriction on trade in goods between the Parties, nothing in this Chapter shall be construed to prevent the adoption or enforcement by either Party of measures:

(a) necessary to protect public morals;

(b) necessary to protect human, animal or plant life or health;

(c) relating to the importation or exportation of gold or silver;

(d) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of GATT 1994, including those relating to customs enforcement, the enforcement of monopolies operated under paragraph 4 of ArticleI I and Article XVII of GATT 1994, the protection of patents, trade marks and copyrights, and the prevention of deceptive practices;

(e) relating to the products of prison labour;

(f) imposed for the protection of national treasures of artistic, historic or archaeological value;

(g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption;

(h) undertaken in pursuance of obligations under any inter-governmental commodity agreement which conforms to criteria submitted to the members of the WTO and not disapproved by them or which is itself so submitted and not so disapproved;

(i) involving restrictions on exports of domestic materials necessary to ensure essential quantities of such materials to a domestic processing industry during periods when the domestic price of such materials is held below the world price as part of a governmental stabilisation plan; provided that such restrictions shall not operate to increase the exports of or the protection afforded to such domestic industry, and shall not depart from the provisions of GATT 1994 relating to nondiscrimination; and

(j) essential to the acquisition or distribution of products in general or local short supply;provided that any such measures shall be consistent with the principle that all members of the WTO are entitled to an equitable share of the international supply of such products, and that any such measures, which are inconsistent with the other provisions of this Agreement shall be discontinued as soon as the conditions giving rise to them have ceased to exist. 2. In the application of paragraph 1 above, the relevant interpretations and operation of the WTO Agreement shall,where appropriate, be taken into account.

Article 20. Restrictions to Safeguard the Balance of Payments Under Chapter 2

Nothing in this Chapter shall be construed to prevent a Party from taking any measure for balance-of-payments purposes. A Party taking such measure shall do so in accordance with the conditions established under Article XII of GATT 1994 and the Understanding on the Balance-of-Payments Provisions of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement.

Article 21. Miscellaneous Provisions Under Chapter 2

1. In fulfilling its obligations under this Chapter, each Party shall take such reasonable measures as may beavailable to it to ensure the observance of the provisions of this Chapter by local governments within its territory.
2. If a Party has entered into an international agreement on trade in goods with a non-Party, or enters into such an agreement after this Agreement comes into force, it shall favourably consider according to goods originating in or destined for the territory of the other Party, treatment no less favourable than the treatment which it accords to like goods originating in or destined for the territory of that non-Party pursuant to such an agreement.

Section CHAPTER 3. Rules of Origin

Article 22. Definitions Under Chapter 3

For the purposes of this Chapter:
(a) the term "material" includes ingredients, parts,components, sub assemblies and goods that were physically incorporated into another good or were subject to a process in the production of another good;
(b) the term "non-originating material" means a material whose country of origin, as determined under this Chapter, is not the same country as the country in which that material is used in production; and
(c) the term "production" means methods of obtaining goods including manufacturing, producing,assembling, processing, raising, growing,breeding, mining, extracting, harvesting, fishing,trapping, gathering, collecting, hunting and capturing.

Article 23. Originating Goods

1. For the purposes of this Agreement, goods wholly obtained or produced entirely in a Party shall be treated as originating goods of that Party. The following goods shall be considered as being wholly obtained or produced entirely in a Party:
(a) live animals born and raised in the territory of that Party;
(b) animals obtained by hunting, trapping, fishing,gathering or capturing in the territory of that Party;
(c) goods obtained from live animals in the territory of that Party;
(d) plants and plant products harvested, picked or gathered in the territory of that Party;
(e) minerals and other naturally occurring substances,not included in sub-paragraphs (a) through (d)above, extracted or taken in the territory of that Party;
(f) goods of sea-fishing and other goods taken from the sea, outside the territorial sea of that Party, by vessels that are entitled to fly the flag of that Party;
(g) goods obtained or produced on board factory ships,outside the territorial sea of that Party, that are entitled to fly the flag of that Party,provided that these goods are manufactured from goods referred to in sub-paragraph (f) above; (h) goods taken from the sea bed or subsoil beneath the sea bed outside the territorial sea of that Party, in accordance with the provisions of the United Nations Convention on the Law of the Sea;
(i) articles collected in the territory of that Party which can no longer perform their original purpose in its territory nor are capable of being restored or repaired and which are fit only for disposal or for the recovery of parts or raw materials;
(j) scrap and waste derived from manufacturing or processing operations or from consumption in the territory of that Party and fit only for disposal or for the recovery of raw materials;
(k) parts or raw materials recovered in the territory of that Party from articles which can no longer perform their original purpose nor are capable of being restored or repaired; and
(l) goods obtained or produced in the territory of that Party solely from goods referred to in sub-paragraphs (a) through (k) above.
2. For the purposes of this Agreement, goods which have undergone sufficient transformation in a Party shall be treated as originating goods of that Party. Goods which satisfy the product-specific rules provided for in Annex IIA shall be considered as goods to which sufficient transformation has been carried out in a Party.
3. Product-specific rules requiring that the materials used undergo a change in tariff classification or a specific manufacturing or processing operation shall apply only to non-originating materials.
4. (a) Product-specific rules using the value-added method require that:
(i) the qualifying value content of the good,determined in accordance with sub-paragraph (b) below and Article 24 below, is not less than the percentage specified by the rule for the good in Annex II A; and
(ii) the good has undergone its last production or operation which satisfies the requirement of sub-paragraph (i) above in the territory of either Party.

(b) For the purpose of calculating the qualifying value content of a good pursuant to sub-paragraph (a) above, the following formula shall be applied: F.O.B. – N.Q.M. Q.V.C. = x 100 F.O.B. Where: Q.V.C. is the qualifying value content of a good, expressed as a percentage; F.O.B. is the free-on-board value of a good payable by the buyer to the seller, regardless of the mode of shipment, not including any internal excise taxes reduced, exempted, or repaid when the good is exported; and N.Q.M. is the non-qualifying value of materials used by the producer in the production of the good, calculated in accordance with sub-paragraph (c) below.
(c) For the purpose of calculating the non-qualifying value of materials pursuant to sub-paragraph (b)above, the following formula shall be applied: N.Q.M. = T.V.M. - Q.V.M. Where: T.V.M. is the total value of materials; and Q.V.M. is the qualifying value of materials.
5. For the purpose of sub-paragraph (c) of paragraph 4 above:
(a) the qualifying value of materials shall be:
(i) the total value of the material if the material satisfies the requirements of subparagraph (b) below; or
(ii) the value of the material that can be attributed to one or both of the Parties if the material does not satisfy the requirements of sub-paragraph (b) below; and
(b) for the purpose of sub-paragraph (a) above, a material shall be considered to have satisfied the requirements of this sub-paragraph if:
(i) the content of the value of the material that can be attributed to one or both of the Parties is not less than 60 per cent of the total value of the material; and
(ii) the material has undergone its last production or operation in the territory of either Party.
6. The value of a material used in the production of a good in a Party shall be the CIF value and shall be determined in accordance with the Agreement on Customs Valuation, or, if this is not known and cannot be ascertained, the first ascertainable price paid for the material in the Party.
7. A material used in the production of a good, for which no product-specific rule is provided for in Annex II A:
(a) shall not be deemed a non-originating material if the material satisfies the same product-specific rule, specified for the good in Annex II A, requiring a change in tariff classification or a specific manufacturing or processing operation;or
(b) shall be deemed a qualifying material if the material satisfies the same product-specific rule, specified for the good in Annex II A, using the value-added method.

Article 24. Accumulation

1. For the purpose of determining whether a good is an originating good of the other Party, either Party shall consider the production in its territory as that in the territory of the other Party, where such good is produced in the territory or territories of one or both Parties.
2. The production of a Party includes the production at different stages undertaken by one or more producers located in its territory.

Article 25. De Minimis

For the application of the product-specific rules provided for in Annex II A, non-originating materials which do not satisfy the rules shall be disregarded, provided that the totality of such materials does not exceed specific percentages in value, weight or volume of the good,as provided for in each chapter of Annex II A.

Article 26. Insufficient Operations

1. The following operations or processes shall not be considered as the sufficient transformation provided for in paragraph 2 of Article 23:
(a) operations to ensure the preservation of products in good condition during transport and storage(such as drying, freezing, keeping in brine) and other similar operations;
(b) changes of packaging and breaking up and assembly of packages;
(c) affixing marks, labels and other like distinguishing signs on products or their packaging;
(d) disassembly;
(e) placing in bottles, cases, boxes and other simple packaging operations;
(f) simple cutting;
(g) simple mixing;
(h) simple assembly of parts to constitute a complete product;
(i) simple making-up of sets of articles; and
(j) a combination of two or more operations referred to in sub-paragraphs (a) through (i) above.
2. A Party shall not exclude the value added through any of the operations or processes provided for in paragraph 1 above in calculating the qualifying value content of a good.
3. An originating good shall not lose its originating condition merely because it undergoes, outside the territory of either of the Parties, any of the operations provided for in paragraph 1 of this Article.

Article 27. Consignment Criteria

The originating goods of the other Party shall be deemed to meet the consignment criteria when they are:
(a) transported directly from the territory of the other Party; or
(b) transported through the territory or territories of one or more non-Parties for the purpose of transit or temporary storing in warehouses in such territory or territories, provided that they do not undergo operations other than unloading, reloading or operations to preserve them in good condition.

Article 28. Unassembled or Disassembled Goods

A good that is imported into the territory of either Party in an unassembled or disassembled form but is classified as an assembled good pursuant to the provisions of sub-paragraph (a) of paragraph 2 of the General Rule for the Interpretation of the Harmonized System shall be considered as an originating good, if the good meets the requirements of the relevant provisions of Articles 23 through 26.

Article 29. Claim for Preferential Tariff Treatment

1. The importing Party may require a certificate of origin for an originating good of the other Party from importers who claim the preferential tariff treatment provided for in paragraph 1 of Article 14 for the good.
2. Notwithstanding paragraph 1 above, the importing Party shall not require a certificate of origin from importers for: (a) an importation of a consignment of a good whose aggregate customs value does not exceed JPY200,000 or its equivalent amount; or
(b) an importation of a good into its territory, for which the importing Party has waived the requirement for a certification of origin.
3. Where originating goods are imported through the territory or territories of one or more non-Parties, the importing Party may request importers, who claim the preferential tariff treatment provided for in paragraph 1 of Article 14 for the goods, to submit a copy of through bill of lading, or a certificate or any other information given by the customs administration of such non-Parties or other relevant entities, which evidences that they do not undergo operation other than unloading, reloading or operations to preserve them in good condition in such territory or territories.

Article 30. Denial of Preferential Tariff Treatment

The importing Party may deny preferential tariff treatment to a good for which an importer in its territory claims preferential tariff treatment where the good does not meet the requirements of this Chapter or where the importer fails to comply with any of the relevant requirements of this Chapter.

Article 31. Certificate of Origin

1. The certificate of origin referred to in paragraph 1 of Article 29 shall be that issued by the certification bodies designated by the exporting Party.
2. Such certificate of origin shall include minimum data specified in Annex II B.
3. The issued certificate of origin shall be valid for 12 months from the date of issue.

Article 32. Advance Rulings

1. The importing Party shall, prior to the importation of a good into its territory, issue a written advance ruling in accordance with its laws and regulations as to whether the good qualifies as an originating good to importers of the good or their agents and exporters of the good or their agents, where a written application is made with all the necessary information and the Party has no reasonable grounds to deny the issuance. The importing Party shall endeavour to issue such advance ruling regarding the origin of the good within 30 days of receipt of all the necessary documents for the advance ruling.
2. The importing Party shall respect the issued ruling with regard to importation into its territory of the good for which the ruling was issued for a period of three years from the date of issuance of the advance ruling.
3. The importing Party may modify or revoke the issued ruling:
(a) if the ruling was based on an error of fact;
(b) if there is a change in the material facts or circumstances on which the ruling was based; or
(c) to conform with an amendment to this Agreement.

Article 33. Assistance for Checking of Certificate of Origin

The importing Party may, within three years after the importation of the good, request the exporting Party to assist to check the authenticity or accuracy of the certificate of origin. Where such request has been made,the exporting Party shall endeavour to take necessary measures to provide the assistance requested.

Article 34. Joint Committee on Rules of Origin

For the purposes of effective implementation of this Chapter, a Joint Committee on Rules of Origin (hereinafter referred to in this Article as "the Committee") shall be established. The functions of the Committee shall be:
(a) to consult regularly to ensure the effective implementation of the provisions in this Chapter;
(b) to discuss necessary amendments of the provisions of this Chapter, including Annex II A, taking into account developments in production processes or other matters (including the recommended amendments to the Harmonized System);
(c) to submit the recommendation on the amendments to the Supervisory Committee; and (d) to discuss any issues concerning rules of origin.

Section CHAPTER 4. Customs Procedures

Article 35. Scope of Chapter 4

This Chapter shall apply to customs procedures required for the clearance of goods traded between the Parties.

Article 36. Customs Clearance

For prompt customs clearance of goods traded between the Parties, each Party shall:
(a) make use of information and communications technology;
(b) simplify its customs procedures; and
(c) make its customs procedures conform, as far as possible, to relevant international standards and recommended practices such as those made under the auspices of the Customs Co-operation Council.

Article 37. Temporary Admission and Goods In Transit

1. Each Party shall continue to facilitate the procedures  for the temporary admission of goods traded between the Parties in accordance with the Customs Convention on the A.T.A. Carnet for the Temporary Admission of Goods(hereinafter referred to in this Article as "the A.T.A.Convention").
2. Each Party shall continue to facilitate customs clearance of goods in transit from or to the territory of the other Party.
3. The Parties shall endeavour to promote, through seminars and courses, the use of A.T.A. carnets pursuant to the A.T.A. Convention for the temporary admission of goods and the facilitation of customs clearance of goods in transit in non-Parties.
4. For the purposes of this Article, the term "temporary admission" means customs procedures under which certain goods may be brought into a customs territory conditionally, relieved totally or partially from the payment of customs duties. Such goods shall be imported for a specific purpose, and shall be intended for re-exportation within a specified period and without having undergone any change except normal depreciation due to the use made of them.

Article 38. Exchange of Information Under Chapter 4

The Parties shall exchange information as provided for in the Implementing Agreement with respect to the implementation of this Chapter. Article 3 shall not apply to such exchange of information.

Article 39. Joint Committee on Customs Procedures

1. For the purposes of effective implementation of this Chapter, a Joint Committee on Customs Procedures(hereinafter referred to in this Article as "the Committee") shall be established. The functions of the Committee shall be:
(a) reviewing and discussing the implementation and operation of this Chapter; and
(b) identifying and recommending to the Supervisory Committee areas to be improved for facilitating trade between the Parties.
2. The composition of the Committee shall be specified in the Implementing Agreement.

Section CHAPTER 5. Paperless Trading

Article 40. Co-operation on Paperless Trading between the Parties

The Parties, recognising that trading using electronic filing and transfer of trade-related information and electronic versions of documents such as bills of lading, invoices, letters of credit and insurance certificates, as an alternative to paper-based methods (hereinafter referred to in this Chapter as "paperless trading"), will significantly enhance the efficiency of trade through reduction of cost and time, shall co-operate with a view to realising and promoting paperless trading between them.

Article 41. Exchange of Views and Information

The Parties shall exchange views and information on realising, promoting and developments in paperless trading.

Article 42. Co-operation on Paperless Trading between Private Entities

The Parties shall encourage co-operation between their relevant private entities engaging in activities related to paperless trading. Such co-operation may include the setting up and operation by such private entities of facilities (hereinafter referred to in this Chapter as "the Facilities") to provide efficient and secured flow of electronic trade-related information and electronic versions of relevant documents between enterprises of the Parties.

Article 43. Review of Realisation of Paperless Trading

The Parties shall review as soon as possible, and in any case, not later than 2004, how to realise paperless trading in which electronic trade-related information and electronic versions of relevant documents exchanged between enterprises of the Parties through the Facilities may be used as supporting documents by the trade regulatory bodies of the respective Parties.

Article 44. Joint Committee on Paperless Trading

1. For the purposes of effective implementation of this Chapter, a Joint Committee on Paperless Trading(hereinafter referred to in this Article as "the Committee") shall be established. The functions of the Committee shall be:
(a) reviewing and discussing issues concerning the effective implementation of this Chapter;
(b) exchanging views and information on paperless trading; and (c) discussing other issues relating to paperless trading.
2. The composition of the Committee shall be specified in the Implementing Agreement.

Section CHAPTER 6. Mutual Recognition

Article 45. Definitions Under Chapter 6

1. For the purposes of this Chapter:
(a) the term "conformity assessment procedure" means any procedure to determine, directly or indirectly, whether products or processes fulfil relevant technical requirements set out in the applicable laws, regulations and administrative provisions of a Party;
(b) the term "conformity assessment body" means a body which conducts conformity assessment procedure, and the term "registered conformity assessment body" means the conformity assessment body registered pursuant to Article 53;
(c) the term "designation" means the designation of conformity assessment bodies by a Designating Authority of a Party pursuant to the applicable laws, regulations and administrative provisions of that Party;
(d) the term "Designating Authority" means an authority of a Party with the power to designate,monitor, withdraw the designation of, suspend the designation of, and withdraw the suspension of the designation of the conformity assessment bodies in its territory that conduct conformity assessment procedures based upon requirements set out in the applicable laws, regulations and administrative provisions of the other Party;
(e) the term "criteria for designation" means the criteria which conformity assessment bodies of a Party are required to fulfil in order to be designated by the Designating Authority of that Party, and other relevant conditions which designated conformity assessment bodies are required to continuously fulfil after the designation, as set out in the applicable laws,regulations and administrative provisions of the other Party specified in the relevant Sectoral Annex; and
(f) the term "verification" means an action to verify in the territories of the Parties, by such means as audits or inspections, compliance with the criteria for designation by a conformity assessment body.
2. Any term used in this Chapter, unless otherwise defined herein, has the meaning assigned to it in the ISO/IEC Guide 2: 1996 Edition, "Standardisation and related activities – General vocabulary".

Article 46. General Obligations

Each Party shall accept, in accordance with the provisions of this Chapter, the results of conformity assessment procedures required by the applicable laws,regulations and administrative provisions of that Party specified in the relevant Sectoral Annex, including certificates and marks of conformity, that are conducted by the registered conformity assessment bodies of the other Party.

Article 47. Scope of Chapter 6

1. This Chapter applies to designation of conformity assessment bodies and conformity assessment procedures for products or processes covered by its Sectoral Annexes. Sectoral Annexes may consist of Part A and Part B. Sectoral Annexes are attached to this Agreement as Annex III.
2. Part A of Sectoral Annexes shall include, inter alia,provisions on scope and coverage.
3. Part B of Sectoral Annexes shall set out the following matters:
(a) the applicable laws, regulations and administrative provisions of each Party concerning the scope and coverage;
(b) the applicable laws, regulations and administrative provisions of each Party stipulating the requirements covered by this Chapter, all the conformity assessment procedures covered by this Chapter to satisfy such requirements and the criteria for designation of conformity assessment bodies; and
(c) the list of Designating Authorities.

Article 48. Designating Authorities

Each Party shall ensure that Designating Authorities have the necessary power to designate, monitor (including verification), withdraw the designation of, suspend the designation of and withdraw the suspension of the designation of the conformity assessment bodies that conduct conformity assessment procedures based upon the requirements set out in the applicable laws, regulations and administrative provisions of the other Party specified in the relevant Sectoral Annex.

Article 49. Verification and Monitoring of Conformity Assessment Bodies

1. Each Party shall ensure, through appropriate means such as audits, inspections or monitoring, that the registered conformity assessment bodies fulfil the criteria for designation set out in the applicable laws, regulations and administrative provisions of the other Party specified in the relevant Sectoral Annex. When applying the criteria for designation of the conformity assessment bodies,Designating Authorities of a Party should take into account the bodies' understanding of and experience relevant to the requirements set out in the applicable laws, regulations and administrative provisions of the other Party.

2. Each Party may request the other Party, by indicating in writing a reasoned doubt on whether a registered conformity assessment body complies with the criteria for designation set out in the applicable laws, regulations and administrative provisions specified in the relevant Sectoral Annex, to conduct verification of the conformity assessment body in accordance with the laws, regulations and administrative provisions of that other Party.

3. Each Party may, upon request, participate as an observer in the verification of conformity assessment bodies conducted by the Designating Authorities of the other Party, with the prior consent of such conformity assessment bodies, in order to maintain a continuing understanding of that other Party's procedures for verification.

4. The Parties shall, in accordance with the procedures to be determined by the Joint Committee on Mutual Recognition (hereinafter referred to in this Chapter as"the Committee") to be established pursuant to Article 52,exchange information on methods, including accreditation systems, used to designate the conformity assessment bodies and to ensure that the registered conformity assessment bodies fulfil the criteria for designation.

5. Each Party should encourage its registered conformity assessment bodies to co-operate with the conformity assessment bodies of the other Party.

Article 50. Suspension of Designation

1. In case of suspension of the designation of a registered conformity assessment body, the Party whose Designating Authority has suspended the designation shall immediately notify the other Party and the Committee to that effect. The registration of that conformity assessment body shall be suspended from the time of receipt of the notification by the co-chairman of that other Party on the Committee. The other Party shall accept the results of the conformity assessment procedures conducted by that conformity assessment body prior to the suspension of the designation.
2. In case of lifting of the suspension of the designation of a registered conformity assessment body, the Party whose Designating Authority has lifted the suspension of the designation shall immediately notify the other Party and the Committee to that effect. The suspension of the registration of that conformity assessment body shall be lifted from the time of receipt of the notification by the co-chairman of that other Party on the Committee. The other Party shall accept the results of the conformity assessment procedures conducted by that conformity assessment body from the time of lifting of the suspension of the registration.

Article 51. Contestation

1. Each Party may contest the compliance with the criteria for designation set out in the applicable laws,regulations and administrative provisions specified in the relevant Sectoral Annex by a registered conformity assessment body of the other Party. Such contestation shall be notified to the Committee and to that other Party in writing with an objective explanation of the reason for the contestation. The Committee shall discuss such contestation within 20 days following the date on which such notification is made.
2. Where the Committee decides to conduct a joint verification, it will be conducted in a timely manner by the Parties with the participation of the Designating Authority that designated the contested conformity assessment body and with the prior consent of the conformity assessment body. The result of such joint verification shall be discussed in the Committee with a view to resolving the issue as soon as possible.
3. The registration of the contested conformity assessment body shall be suspended 15 days after the date on which the notification is made or on the date on which the Committee decides to suspend the registration, whichever is the sooner. The registration of the contested conformity assessment body shall remain suspended until the Committee decides to lift the suspension of the registration of the conformity assessment body. In the event of such suspension, the contesting Party shall accept the results of conformity assessment procedures conducted by that conformity assessment body prior to the date of suspension.

Article 52. Joint Committee on Mutual Recognition

1. A Joint Committee on Mutual Recognition (referred to in this Chapter as "the Committee"), made up of representatives of both Parties, shall be established on the date of entry into force of this Agreement, as a body responsible for the effective implementation of this Chapter.
2. The Committee shall take decisions and adopt recommendations by consensus. It shall meet at the request of either Party under the co-chairmanship of both Parties. The Committee may establish sub-committees and delegate specific tasks to such sub-committees. It shall adopt its rules of procedure.
3. The Committee may consider any matter related to the operation of this Chapter. In particular, it shall be responsible for and/or decide on:
(a) registration of a conformity assessment body, suspension of registration of a conformity assessment body, lifting of suspension of registration of a conformity assessment body, and termination of registration of a conformity assessment body;
(b) establishment and, unless otherwise decided, publication on a sector-by-sector basis of lists of the registered conformity assessment bodies;
(c) establishment of appropriate modalities of information exchange referred to in this Chapter;and
(d) appointment of experts from each Party for the joint verification referred to in paragraph 2 of Article 51 above and sub-paragraph (c) of paragraph 1 of Article 53 below.
4. Without prejudice to Chapter 21, if any problem arises as to the interpretation or application of this Chapter, the Parties shall, first of all, seek an amicable solution through the Committee.
5. The Committee is responsible for co-ordinating and facilitating the negotiation of additional Sectoral Annexes.
6. Any decision made by the Committee will be notified promptly in writing to each Party.
7. The Parties shall, through the Committee:
(a) specify and communicate to each other the applicable articles or annexes contained in the laws, regulations and administrative provisions set out in the Sectoral Annexes;
(b) exchange information concerning the implementation of the applicable laws,regulations and administrative provisions specified in the Sectoral Annexes;
(c) notify each other of any scheduled changes in the laws, regulations and administrative provisions related to this Chapter prior to their entry into force; and (d) notify each other of any scheduled changes concerning their Designating Authorities and the registered conformity assessment bodies.

Article 53. Registration of Conformity Assessment Bodies

1. The following procedure shall apply to the registration of a conformity assessment body:
(a) each Party shall make a proposal that a conformity assessment body of that Party designated by its Designating Authority be registered under this Chapter, by presenting its proposal in writing, supported by necessary documents, to the other Party and the Committee;
(b) the other Party shall consider whether the proposed conformity assessment body complies with the criteria for designation set out in the applicable laws, regulations and administrative provisions of that other Party specified in the relevant Sectoral Annex and indicate its position regarding the registration of that conformity assessment body within 90 days from the receipt of the proposal referred to in sub-paragraph (a)above. In such consideration, such other Party should assume that the proposed conformity assessment body complies with the aforementioned criteria. The Committee shall take a decision whether to register the proposed conformity assessment body within 90 days from the receipt of the proposal; and
(c) in the event that the Committee cannot decide to register the proposed conformity assessment body,the Committee may decide to conduct a joint verification or to request the proposing Party to conduct a verification of the proposed body with the prior consent of such body. After the completion of such verification, the Committee may reconsider the proposal.
2. The proposing Party shall provide the following in formation in its proposal for registration of a conformity assessment body and keep such information up to date:
(a) the name and address of the conformity assessment body;
(b) the products or processes the conformity assessment body is authorised to assess;
(c) the conformity assessment procedures the conformity assessment body is authorised to conduct; and (d) the designation procedure and necessary information used to determine the compliance of the conformity assessment body with the criteria for designation.
3. Each Party shall ensure that its Designating Authority withdraws the designation of a registered conformity assessment body when the Designating Authority considers that the conformity assessment body no longer complies withthe criteria for designation set out in the applicable laws,regulations and administrative provisions of the other Party specified in the relevant Sectoral Annex.
4. Each Party shall propose the termination of the registration of its conformity assessment body when that Party considers that the conformity assessment body no longer complies with the criteria for designation set out in the applicable laws, regulations and administrative provisions of the other Party specified in the relevant Sectoral Annex, or the Designating Authority of that Party withdraws the designation of a conformity assessment body.Proposals for terminating the registration of that conformity assessment body shall be made to the Committee and the other Party. The registration of that conformity assessment body shall be terminated upon receipt of the proposal by the co-chairman of that other Party on the Committee, unless otherwise determined by the Committee.
5. In the case of a registration of a new conformity assessment body, the other Party shall accept the results of conformity assessment procedures conducted by that conformity assessment body from the date of the registration. In the event that the registration of a conformity assessment body is terminated, the other Party shall accept the results of the conformity assessment procedures conducted by that conformity assessment body prior to the termination, without prejudice to paragraph 1 of Article 50 and paragraph 3 of Article 51.

Article 54. General Exceptions Under Chapter 6

Nothing in this Chapter shall be construed to limit the authority of a Party to take measures it considers appropriate, for protecting health, safety or the environment or prevention of deceptive practices.

Article 55. Miscellaneous Provisions Under Chapter 6

1. Nothing in this Chapter shall be construed so as to oblige a Party to accept the standards or technical regulations of the other Party.
2. Nothing in this Chapter shall be construed to entail an obligation upon a Party to accept the result of the conformity assessment procedures of any third country.
3. Nothing in this Chapter shall be construed so as to affect the rights and obligations that either Party has as a party to the Agreement on Technical Barriers to Trade in Annex 1A to the WTO Agreement.
4. Nothing in this Chapter shall be construed so as to prevent a Party from requiring a filing formality of products assessed by a registered conformity assessment body of the other Party under this Chapter, provided that such formality does not constitute conformity assessment procedures.

Article 56. Territorial Application