(b) For the purposes of this paragraph, pallet means a small, portable platform, which consists of two decks separated by bearers or a single deck supported by feet, on which goods can be moved, stacked, and stored, and which is designed essentially for handling by means of fork lift trucks, pallet trucks, or other jacking devices.
5. If any condition that a Party imposes under paragraph 3 has not been fulfilled, the Party may apply the customs duty and any other charge that would normally be owed on the good in addition to any other charges or penalties provided for under its laws and regulations.
6. Each Party shall adopt and maintain procedures providing for the expeditious release of goods admitted under this Article. To the extent possible, those procedures shall provide that when a good admitted under this Article accompanies a national of the other Party who is seeking temporary entry, the good shall be released simultaneously with the entry of that national.
7. Each Party shall permit a good temporarily admitted under this Article to be exported through a customs port other than the port through which it was admitted.
8. Each Party shall, in accordance with its laws and regulations, provide that the importer or other person responsible for a good admitted under this Article shall not be liable for failure to export the good on presentation of satisfactory proof to the importing Party that the good was destroyed within the period fixed for temporary admission, including any lawful extension.
9. Subject to Chapter 7 (Investment) and Chapter 8 (Services):
(a) each Party shall allow a container used in international traffic that enters its territory from the territory of the other Party to exit its territory on any route that is reasonably related to the economic and prompt departure of that container;
(b) neither Party shall require any security or impose any penalty or charge solely by reason of any difference between the customs port of entry and the customs port of departure of a container;
(c) neither Party shall condition the release of any obligation, including any security, that it imposes in respect of the entry of a container into its territory on the exit of that container through any particular customs port of departure; and
(d) neither Party shall require that the carrier bringing a container from the territory of the other Party into its territory be the same carrier that takes such container to the territory of the other Party.
2.10. Import and Export Restrictions
1. Except as otherwise provided in this Agreement, neither Party shall adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, except in accordance with Article XI of the GATT 1994 and its interpretative notes, and to this end Article XI of the GATT 1994 and its interpretative notes are incorporated into and made part of this Agreement, mutatis mutandis.
2. The Parties understand that the GATT 1994 rights and obligations incorporated by patagraph 1 prohibit, in any circumstances in which any other form of restriction is prohibited, a Party from adopting or maintaining:
(a) export and import price requirements, except as permitted in enforcement of countervailing and anti-dumping duty orders and undertakings;
(b) import licensing conditioned on the fulfilment of a performance requirement; or
(c) voluntary export restraints inconsistent with Article VI of the GATT 1994, as implemented under Article 18 of the SCM Agreement and Article 8.1 of the AD Agreement.
3. For greater certainty, paragraph 1 shall apply to the importation of commercial cryptographic goods.
4, For the purposes of paragraph 3, commercial cryptographic goods means any good implementing or incorporating cryptography, if the good is not designed or modified specifically for government use and is sold or otherwise made available to the public.
5. 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 that Party from:
(a) limiting or prohibiting the importation of the good of the non-Party from the territory of the other Party; or
(b) requiring, as a condition for exporting the good of that 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.
6. In the event that a Party adopts or maintains a prohibition or restriction on the importation of a good from a non-Party, it shall, on the request of the other Party, consult with the other Party with a view to avoiding undue interference with or distortion of pricing, marketing, or distribution arrangements in that other Party.
7. Neither Party shall, as a condition for engaging in importation or for the importation of a good, require a person of the other Party to establish or maintain a contractual or other relationship with a distributor in its territory.
8. For greater certainty, paragraph 7 does not prevent a Party from requiring a person referred to in that paragraph to designate a point of contact for the purposes of facilitating communications between its regulatory authorities and that person.
2.11. Remanufactured Goods
1. For greater certainty, Article 2.10.1 shall apply to prohibitions and restrictions on the importation of remanufactured goods.
2. If a Party adopts or maintains measures prohibiting or restricting the importation of used goods, it shall not apply those measures to remanufactured goods. (1)
2.12. Import Licensing
1. Neither Party shall adopt or maintain a measure that is inconsistent with the Import Licensing Agreement.
2. Promptly after the Protocol enters into force for a Party, that Party shall notify the other Party of its existing import licensing procedures, if any. The notice shall include the information specified in Article 5.2 of the Import Licensing Agreement and any information required under paragraph 6.
3. A Party shall be deemed to be in compliance with paragraph 2 with respect to an existing import licensing procedure if:
(a) it has notified that procedure to the WTO Committee on Import Licensing provided for in Article 4 of the Import Licensing Agreement together with the information specified in Article 5.2 of that agreement;
(b) in the most recent annual submission, due before the date of entry into force of the Protocol for that Party, to the WTO Committee on Import Licensing in response to the annual questionnaire on import licensing procedures described in Article 7.3 of the Import Licensing Agreement, it has provided, with respect to that procedure, the information requested in that questionnaire; and
(c) it has included in either the notice described in subparagraph (a) or the annual submission described in subparagraph (b) any information required to be notified to the other Party under paragraph 6.
4. Each Party shall comply with Article 1.4(a) of the Import Licensing Agreement with respect to any new or modified import licensing procedure. Each Party shall also publish on an official government website any information that it is required to publish under Article 1.4(a) of the Import Licensing Agreement.
5. Each Party shall notify the other Party of any new import licensing procedures it adopts and any modifications it makes to its existing import licensing procedures, if possible, no later than 60 days before the new procedure or modification takes effect. In no case shall a Party provide the notification later than 60 days after the date of its publication. The notification shall include any information required under paragraph 6. A Party shall be deemed to be in compliance with this obligation if it notifies a new import licensing procedure or a modification to an existing import licensing procedure to the WTO Committee on Import Licensing in accordance with Article 5.1, Article 5.2 or Article 5.3 of the Import Licensing Agreement and includes in its notification any information required to be notified to the other Party under paragraph 6.
6. (a) A notice under paragraph 2, paragraph 3 or paragraph 5 shall state if, under any import licensing procedure that is a subject of the notice:
(i) the terms of an import licence for any product limit the permissible end users of the product; or
(ii) the Party imposes any of the following conditions on eligibility for obtaining a licence to import any product:
(A) membership in an industry association;
(B) approval by an industry association of the request for an import licence;
(C) a history of importing the product or similar products;
(D) minimum importer or end user production capacity;
(E) minimum importer or end user registered capital; or
(F) a contractual or other relationship between the importer and a distributor in the Party's territory.
(b) A notice that states, under subparagraph (a), that there is a limitation on permissible end users or a licence-eligibility condition shall:
(i) list all products for which the end-user limitation or licence eligibility condition applies; and
(ii) describe the end-user limitation or licence-eligibility condition.
7. Each Party shall respond within 60 days to a reasonable enquiry from the other Party concerning its licensing rules and its procedures for the submission of an application for an import licence, including the eligibility of persons, firms and institutions to make an application, the administrative body or bodies to be approached and the list of products subject to the licensing requirement.
8. If a Party denies an import licence application with respect to a good of the other 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 for the denial.
9. Neither Party shall apply an import licensing procedure to a good of the other Party unless it has, with respect to that procedure, met the requirements of paragraph 2 or paragraph 4, as applicable.
2.13. Administrative Fees and Formalities
1. Each Party shall ensure, in accordance with Article VII:1 of GATT 1994 and 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 of GATT 1994, and antidumping and countervailing duties) imposed on or in connection with importation or exportation are limited in amount 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 shall require consular transactions, including related fees and charges, in connection with the importation of a good of another Party.
3. Each Party shall make publicly available online a current list of the fees and charges it imposes in connection with importation or exportation.
4. Neither Party shall levy fees and charges on or in connection with importation or exportation on an ad valorem basis.
5. Each Party shall periodically review its fees and charges, with a view to reducing their number and diversity if practicable.
2.14. Export Duties
A Party shall not 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 adopted or maintained on any such good when destined for domestic consumption. (2)
2.15. Non-tariff Measures
1. Neither Party shall adopt or maintain any non-tariff measures on the importation of any good of the other Party or on the exportation of any good destined for the territory of the other Party except in accordance with its WTO rights and obligations or in accordance with this Agreement.
2. Each Party shall ensure the transparency of its non-tariff measures permitted under paragraph 1 and that they are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to trade between the Parties.
2.16. Subsidies and Countervailing Measures
1. Each Party shall prohibit export subsidies on all goods, including agricultural goods.
2. If either Party grants or maintains any subsidy which operates to increase exports of any product from, or to reduce imports of any product into, its territory, it shall notify the other Party to the extent and nature of the subsidisation, of the estimated effect of the subsidisation on the quantity of the affected product or products imported into or exported from its territory and of the circumstances making the subsidisation necessary. In any case in which it is determined that serious prejudice to the interests of the other Party is caused or threatened by any subsidisation, the Party granting the subsidy shall, upon request, discuss with the other Party the possibility of limiting the subsidisation. This paragraph shall be applied in conjunction with the relevant applicable provisions of the GATT 1994 and the SCM Agreement.
3. The Parties reaffirm their commitment to abide by the SCM Agreement in respect of actionable subsidies.
4. Each Party shall seek to avoid causing adverse effects to the interests of the other Party in terms of Article 5 of the SCM Agreement.
2.17. Anti-Dumping Measures
1. Both Parties are Members of the AD Agreement. For the purposes of trade between the Parties, the following changes are agreed in terms of implementation of the AD Agreement in order to bring greater discipline to anti-dumping investigations and to minimise the opportunities to use anti-dumping in an arbitrary or protectionist manner:
(a) the de minimis dumping margin of two per cent expressed as a percentage of the export price below which no anti-dumping duties can be imposed provided for in Article 5.8 of the AD Agreement is raised to five per cent;
(b) the new de minimis margin of five per cent established in sub-paragraph (a) is applied not only in new cases but also in refund and review cases;
(c) the maximum volume of dumped imports from the exporting Party which shall normally be regarded as negligible under Article 5.8 of the AD Agreement is increased from three per cent to five per cent of imports of the like product in the importing Party. Existing cumulation provisions under Article 5.8 continue to apply;
(d) the time frame to be used for determining the volume of dumped imports under the preceding sub-paragraphs shall be representative of the imports of both dumped and non-dumped goods for a reasonable period. Such reasonable period shall normally be at least 12 months;
(e) the period for review or termination of anti-dumping duties provided for in Article 11.3 of the AD Agreement is reduced from five years to three years.
2. Notification procedures shall be as follows:
(a) immediately following the acceptance of a properly documented application from an industry in one Party for the initiation of an anti-dumping investigation in respect of goods from the other Party, the Party that has accepted the properly documented application shall immediately inform the other Party;
(b) if a Party considers that, in accordance with Article 5 of the AD Agreement, there is sufficient evidence to justify the initiation of an anti-dumping investigation, it shall give written notice to the other Party in accordance with Article 12.1 of the AD Agreement and observe the requirements of Article 17.2 of the AD Agreement concerning consultations.
2.18. Safeguard Measures
No Party shall initiate or take any safeguard measure within the meaning of the Safeguards Agreement against the goods of the other Party from the date of entry into force of this Agreement.
2.19. Publication and Administration of Trade Regulations
Article X of the GATT 1994 is incorporated into and shall form part of this Agreement, mutatis mutandis.
Chapter 3. RULES OF ORIGIN AND ORIGIN PROCEDURES
Section A. Rules of Origin
3.1. Definitions
For the purposes of this Chapter:
aquaculture means the farming of aquatic organisms, including fish, molluscs, crustaceans, other aquatic invertebrates and aquatic plants from seed stock such as eggs, fry, fingerlings or larvae, by intervention in the rearing or growth processes to enhance production such as regular stocking, feeding or protection from predators;
fungible goods or materials means goods or materials that are interchangeable for commercial purposes and whose properties are essentially identical;
Generally Accepted Accounting Principles means those principles recognised by consensus or with substantial authoritative support in the territory of a Party with respect to the recording of revenues, expenses, costs, assets and liabilities; the disclosure of information; and the preparation of financial statements. These principles may encompass broad guidelines for general application, as well as detailed standards, practices and procedures;
material means a good that is used in the production of another good;
non-originating good or non-originating material means a good or material that does not qualify as originating in accordance with this Chapter;
packing materials and containers for shipment means goods used to protect another good during its transportation, but does not include the packaging materials or containers in which a good is packaged for retail sale;
producer means a person who engages in the production of a good;
production means operations including growing, cultivating, raising, mining, harvesting, fishing, trapping, hunting, capturing, collecting, breeding, extracting, aquaculture, gathering,
manufacturing, processing or assembling a good;
recovered material means a material in the form of one or more individual parts that results from:
(a) the disassembly of a used good into individual parts; and
(b) the cleaning, inspecting, testing or other processing of those parts as necessary for improvement to sound working condition;
transaction value means the price actually paid or payable for the good when sold for export to the country of importation or other value determined in accordance with the Customs Valuation Agreement; and
value of the good means the transaction value of the good excluding any costs incurred in the international shipment of the good.
3.2. Originating Goods
Except as otherwise provided in this Chapter, each Party shall provide that a good is originating if it is:
(a) wholly obtained or produced entirely in the territory of one or both of the Parties by one or more producers as established in Article 3.3;
(b) produced entirely in the territory of one or both of the Parties by one or more producers, exclusively from originating materials; or
(c) produced entirely in the territory of one or both of the Parties by one or more producers using non-originating materials provided the good satisfies all applicable requirements of Annex 3.1,
and the good satisfies all other applicable requirements of this Chapter.
3.3. Wholly Obtained or Produced Goods
Each Party shall provide that for the purposes of Article 3.2, a good is wholly obtained or produced entirely in the territory of one or both of the Parties if it is:
(a) a plant or plant good, grown, cultivated, harvested, picked or gathered there; (b) a live animal born and raised there;
(c) a good obtained from a live animal there;
(d) an animal obtained by hunting, trapping, fishing, gathering or capturing there; (e) a good obtained from aquaculture there;
(f) a mineral or other naturally occurring substance, not included in subparagraphs (a) to (e), extracted or taken from there;
(g) fish, shellfish and other marine life taken from the high seas, by vessels that are entitled to fly the flag of that Party;
(h) a good produced from goods referred to in subparagraph (g) on board a factory ship that is registered, listed or recorded with a Party and entitled to fly the flag of that Party;
(i) a good other than fish, shellfish and other marine life taken by a Party or a person of a Party from the seabed or subsoil outside the territories of the Parties and beyond areas over which non-Parties exercise jurisdiction provided that Party or person of that Party has the right to exploit that seabed or subsoil in accordance with international law;
(j) a good that is:
(i) waste or scrap derived from production there; or
(ii) waste or scrap derived from used goods collected there, provided that those goods are fit only for the recovery of raw materials; and
(k) a good produced there, exclusively from goods referred to in subparagraphs (a) to (j), or from their derivatives.
3.4. Treatment of Recovered Materials Used In Production of a Remanufactured
Good
1. Each Party shall provide that a recovered material derived in the territory of one or both of the Parties is treated as originating when it is used in the production of, and incorporated into, a remanufactured good.
2. For greater certainty:
(a) a remanufactured good is originating only if it satisfies the applicable requirements of Article 3.2; and
(b) a recovered material that is not used or incorporated in the production of a remanufactured good is originating only if it satisfies the applicable requirements of Article 3.2.
3.5. Regional Value Content
1. Each Party shall provide that a regional value content requirement specified in this Chapter to determine whether a good is originating, is calculated as follows:
(a) Build-down Method: Based on Value of Non-Originating Materials
RVC= Value of the Good - VNM / Value of the Good x 100
or
(b) Build-up Method: Based on Value of Originating Materials
RVC = VOM / Value of the Good x 100
where: "RVC" is the regional value content of a good, expressed as a percentage;
"VNM" is the value of non-originating materials, including materials of undetermined origin, used in the production of the good; and
"VOM" is the value of originating materials used in the production of the good in the territory of one or both of the Parties.
2. Each Party shall provide that all costs considered for the calculation of regional value content are recorded and maintained in conformity with the Generally Accepted Accounting Principles applicable in the territory of a Party where the good is produced.
3.6. Materials Used In Production
1. Each Party shall provide that if a non-originating material undergoes further production such that it satisfies the requirements of this Chapter, the material is treated as originating when determining the originating status of the subsequently produced good, regardless of whether that material was produced by the producer of the good.
2. Each Party shall provide that if a non-originating material is used in the production of a good, the following may be counted as originating content for the purposes of determining whether the good meets a regional value content requirement:
(a) the value of processing of the non-originating materials undertaken in the territory of one or both of the Parties; and
(b) the value of any originating material used in the production of the non- originating material undertaken in the territory of one or both of the Parties.
3.7. Value of Materials Used In Production
Each Party shall provide that for the purposes of this Chapter, the value of a material is:
(a) for a material imported by the producer of the good, the transaction value of the material at the time of importation, including the costs incurred in the international shipment of the good;
(b) for a material acquired in the territory where the good is produced:
(i) the price paid or payable by the producer in the territory of the Party where the producer is located;
(ii) the value as determined for an imported material in subparagraph (a); or
(iii) the earliest ascertainable price paid or payable in the territory of the Party; or
(c) for a material that is self-produced: