Title

AGREEMENT BETWEEN THE GOVERNMENT OF THE ISLAMIC REPUBLIC OF PAKISTAN AND THE GOVERNMENT OF MALAYSIA FOR A CLOSER ECONOMIC PARTNERSHIP

Preamble

The Government of Malaysia and the Government of the Islamic Republic of Pakistan,
CONSCIOUS of the friendship and growing economic ties between them;
DESIRING to provide a platform from which to unlock the benefits of deeper economic ties between the two strategically located trading centres, each serving South Asia and the Asia-Pacific regions;
DESIRING to improve the efficiency and competitiveness of their goods and services sectors and to promote and expand trade and investment flows between them;
DESIRING to promote greater synergy between economies of the two countries with complementary strengths in various sectors;
RECOGNISING that strengthening their economic partnership will bring economic and social benefits and improve living standards in their countries; BUILDING on their rights, obligations and undertakings under the World Trade Organization;
MINDFUL of the need to uphold the their rights to regulate in order to meet national policy objectives;
CONSIDERING that the expansion of their domestic market, through economic integration, is vital for accelerating the economic development of their countries;
RECOGNISING the need for good governance and a predictable, transparent and stable business environment to enable business to conduct transactions freely, use resources efficiently and make investment and planning decisions with certainty;
RECALLING the contribution made to the development of their bilateral trade and investment relationship pursuant to the Trade Agreement between the Government of Malaysia and the Government of the Islamic Republic of Pakistan signed in Kuala Lumpur on 5 November 1987 and the Agreement between the Government of Malaysia and the Government of the Islamic Republic of Pakistan for the Promotion and Protection of Investment signed in Kuala Lumpur on 7 July 1995;
FURTHER RECALLING the Agreement on the Early Harvest Programme for the Free Trade Agreement between the Government of Malaysia and the Government of the Islamic Republic of Pakistan signed in Kuala Lumpur on 1 October 2005, as amended (hereinafter referred to as "the EHP Agreement"); and
DESIRING to promote greater regional economic integration through this Agreement, HAVE AGREED as follows:

Body

Chapter 1. General Provisions

Article 1. Objectives

The objectives of this Agreement are to:
(a) establish a free trade area that will promote market opportunities for goods, services and investment between the countries of the Parties;
(b) progressively liberalise and promote trade in goods and services, and cross-border investment flows;
(c) promote and enhance economic, trade and investment cooperation activities between the Parties;
(d) establish a framework of transparent, predictable and facilitative rules to govern and regulate trade and investment between the countries of the Parties including the protection of investments and investment activities;
(e) improve the efficiency and competitiveness of their goods and services sectors; and
(f) establish a framework to enhance closer cooperation on socio-economic partnership in areas of mutual interest as agreed by the Parties.

Article 2. Definitions

For the purposes of this Agreement:
(a) "days" means calendar days, including weekends and holidays;
(b) "GATT 1994" means the General Agreement on Tariffs and Trade 1994 in Annex 1A to the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994, as may be amended. For the purposes of this Agreement, references to Articles in the GATT 1994 include the interpretative notes;
(c) "GATS" means the General Agreement on Trade in Services in Annex 1B to the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994, as may be amended;
(d) "Harmonized System" ("HS") means the Harmonized Commodity Description and Coding System set out in the Annex to the International Convention on the Harmonized Commodity Description and Coding System, as may be amended;
(e) "Malaysia" means the territories of the Federation of Malaysia, the territorial waters of Malaysia and the sea-bed and subsoil of the territorial waters, and the airspace above such areas, and includes any area extending beyond the limits of the territorial waters of Malaysia, and the sea-bed and subsoil of any such area, which has been or may hereafter be designated under the laws of Malaysia and in accordance with international law as an area over which Malaysia has sovereign rights or jurisdiction for the purposes of exploring and exploiting the natural resources, whether living or non-living; and
(f) "Pakistan" means all the territories of the Islamic Republic of Pakistan, including its territorial sea, in which the laws and regulations of Pakistan are in force, and all the area beyond its territorial sea, including the sea-bed and subsoil thereof, over which Pakistan exercises sovereign rights or jurisdiction in accordance with international law and the laws and regulations of Pakistan;
(g) "Parties" means the Government of Malaysia and the Government of the Islamic Republic of Pakistan and "Party" means either the Government of Malaysia or the Government of the Islamic Republic of Pakistan;
(h) "TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property Rights in Annex 1C to the WTO Agreement; and
(i) "WTO Agreement" means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994, as may be amended.

Article 3. Transparency

1. The Parties shall make publicly available their laws, regulations and national policies of general application with respect to any matter covered by this Agreement.
2. The Parties shall make easily available to the public, the names or designations of the competent authorities responsible for the laws, regulations and national policies of general application referred to in paragraph 1 of this Article.
3. Each Party shall, upon request by the other Party, within a reasonable period of time, respond to specific questions from, and provide information to the other Party in the English language with respect to matters referred to in paragraph 1 of this Article.
4. At the request of the interested persons of the countries of the Parties, each Party shall endeavour to provide information relating to the specific matters raised by the interested persons and pertaining to this Agreement. Each Party may also supply other pertinent information relating to this Agreement which it consider the interested persons should be made aware of.

Article 4. Administrative Procedures

1. Where administrative decisions, which pertain to, or affect the implementation and operation of this Agreement are taken by the competent authorities of a Party, the competent authorities shall, in accordance with the laws and regulations of the country of that Party, endeavour to:
(a) inform the applicant of the decision within a reasonable period of time after the submission of an application considered complete under the laws and regulations of the country of that Party; and
(b) provide, within a reasonable period of time, information concerning the status of the application, at the request of the applicant.
2. The competent authorities shall, where so required by the laws and regulations of the country of the Party, establish standards for taking administrative decisions in response to applications submitted to it. The competent authorities shall endeavour to make such standards:
(a) as specific as possible; and
(b) publicly available except when it would extraordinarily raise administrative difficulties for the Party.

Article 5. Review and Appeal

1. Each Party shall maintain judicial or quasi-judicial tribunals or procedures for the purpose of prompt review or appeal as the case may be, and where warranted, correction of actions taken by the respective competent authorities in the matters covered by this Agreement. Such tribunals or procedures shall be independent of the authorities entrusted with the administrative enforcement of such actions.
2. Each Party shall ensure that the parties in such tribunals or procedures are provided with the right to:
(a) a reasonable opportunity to support or defend their respective positions; and
(b) a decision based on the evidence and submissions of record.
3. Each Party shall ensure, subject to appeal or further review as provided in its laws and regulations, that the decision referred to in paragraph 1 of this Article is implemented by the relevant authorities.

Article 6. Confidentiality

1. Each Party shall undertake, in accordance with its laws and regulations, to observe the confidentiality of information provided by the other Party.
2. Notwithstanding paragraph 1 of this Article, the information provided under this Agreement may be transmitted to a third party subject to the prior written consent of the providing Party.
3. Nothing in this Agreement shall require any 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.
4. In the event of termination of this Agreement, the Parties agree that the provisions of this Article shall continue to apply, unless otherwise agreed by the Parties.

Article 7. State Trading Enterprises

Nothing in this Agreement shall be construed to prevent a Party from maintaining or establishing a state trading enterprise in accordance with Article XVII of the GATT 1994.

Article 8. Joint Committee

1. A Joint Committee shall be established under this Agreement.
2. The functions of the Joint Committee shall be to:
(a) review the implementation and operation of this Agreement;
(b) submit a report to the Parties through the focal points referred to in Article 10 on the implementation and operation of this Agreement;
(c) consider and recommend to the Parties any amendments to this Agreement;
(d) facilitate the avoidance and settlement of disputes arising from this Agreement;
(e) supervise and coordinate the work of all Sub-Committees established under this Agreement;
(f) adopt any necessary decisions; and
(g) carry out any other function as the Parties may agree.
3. The Joint Committee:
(a) shall be co-chaired by senior officials of the Parties, unless the Parties agree to convene the meeting at ministerial level; and
(b) may establish and delegate its responsibilities to Sub-Committees.
4. The Joint Committee shall establish its rules and procedures and financial arrangements.
5. The Joint Committee shall convene its inaugural meeting within one year after the entry into force of this Agreement. Its subsequent meetings shall be held at such frequency as the Parties may agree upon. The Joint Committee shall convene alternately in Malaysia and Pakistan, unless the Parties otherwise agree. Special meetings of the Joint Committee may be convened within 30 days upon the request of either Party.

Article 9. Sub-committees

The following Sub-Committees shall be established upon the entry into force of this Agreement:
(a) Sub-Committee on Trade in Goods;
(b) Sub-Committee on Trade in Services;
(c) Sub-Committee on Customs Procedures; and (d) Sub-Committee on Investment.

Article 10. Focal Points

Communications between the Parties on any matter relating to this Agreement shall be facilitated through the following focal points:
(a) in the case of Malaysia, the Ministry of International Trade and Industry; and
(b) in the case of Pakistan, the Ministry of Commerce.

Chapter 2. Trade In Goods

Article 11. Definitions

For the purposes of this Chapter:
(a) "customs duties" means duties imposed in connection with the importation of a good provided that such customs duties shall not include:
(i) charges equivalent to internal taxes, including excise duties, sales tax, and goods and services taxes imposed in accordance with a Party's commitments under paragraph 2 of Article III of the GATT 1994;
(ii) anti-dumping or countervailing duty or safeguard duty applied in accordance with Chapter 5; or
(iii) fees or other charges that are limited in amount to the approximate cost of services rendered, and do not represent a direct or indirect protection for domestic goods or a taxation of imports for fiscal purposes;
(b) "customs value of goods" means the value of goods for the purposes of levying ad valorem customs duties on imported goods;
(c) "originating goods" means the goods that qualify as originating goods in accordance with Chapter 3;
(d) "goods" includes manufactured goods and commodities in their raw, semi-processed and processed forms.

Article 12. Classification of Goods

For the purposes of this Agreement, the classification of goods in trade between the countries of the Parties shall be in conformity with the Harmonized System.

Article 13. National Treatment

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

Article 14. Reduction or Elimination of Customs Duties

1. Customs duties which are levied at zero percent or nil on the date of signing of this Agreement shall be kept at zero percent or nil by the Parties.
2. Customs duties in excess of zero percent or nil shall be reduced and where relevant, eliminated by the Parties on originating goods of the other Party in accordance with each Party's Schedule of Concessions in Annex 1.

Article 15. Modification or Withdrawal of Concessions

1. Nothing in this Agreement shall prevent a Party from accelerating the implementation of concessions provided for in this Agreement or to incorporate new goods into such concessions, provided that such arrangements are notified to the other Party.
2. Either Party may, by mutual agreement, modify or withdraw any concession provided in Annex 1. Such mutual agreement shall include provisions for compensatory adjustment with respect to other goods. The Party modifying or withdrawing any concession provided in Annex 1 shall maintain a general level of reciprocal and mutually advantageous concessions not less favourable to trade than provided in this Agreement prior to such agreement.
3. The modification or withdrawal of concessions shall be treated as an amendment to Annex 1 and shall enter into force in accordance with the procedures set out in Article 131.

Article 16. Customs Valuation

For the purposes of determining the customs value of goods traded between the countries of the Parties, 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, as may be amended shall, mutatis mutandis, be incorporated into and made part of this Agreement.

Article 17. Non-tariff Measures

1. Except where expressly permitted by this Agreement or by the Parties' obligations under the WTO Agreement, neither Party shall adopt or maintain any non-tariff measure which constitutes a restriction on goods traded between the Parties.
2. Each Party shall ensure the transparency of its non-tariff measures permitted under paragraph 1 of this Article and that they are not constituted, adopted or applied with a view to or with the effect of creating unnecessary restrictions to trade between the Parties.
3. Each Party shall identify the non-tariff measures which are creating unnecessary restrictions to trade for elimination upon the entry into force of this Agreement. The time frame for elimination of these non-tariff measures shall be mutually agreed upon by the Parties.

Article 18. Restrictions to Safeguard the Balance-of-payments

1. The Parties shall endeavour to avoid the imposition of restrictive measures for balance-of-payments purposes.
2. Any measure taken for balance-of-payments purposes shall be in accordance with Article XII, Section B of Article XVIII and the Understanding on the Balance-of-Payments Provisions of the GATT 1994, which shall, mutatis mutandis, be incorporated into and made part of this Agreement.
3. Nothing in this Chapter shall be regarded as altering the rights enjoyed and obligations undertaken by a Party as a party to the Articles of Agreement of the International Monetary Fund, as may be amended.

Article 19. Sub-committee on Trade In Goods

1. For the purposes of the effective implementation and operation of this Chapter, the functions of the Sub-Committee on Trade in Goods (hereinafter referred to in this Article as "the Sub-Committee") established in accordance with Article 9 shall be:
(a) reviewing and monitoring the implementation and operation of this Chapter;
(b) discussing any issues related to this Chapter;
(c) reporting the findings and the outcome of discussions of the Sub-Committee to the Joint Committee; and
(d) carrying out other functions as may be delegated by the Joint Committee in accordance with Article 8.
2. The Sub-Committee shall meet at such venue and time as may be agreed by the Parties.
3. The Sub-Committee shall be:
(a) composed of representatives of the Parties; and
(b) co-chaired by officials of the Parties.

Chapter 3. Rules of Origin

Article 20. Definitions

For the purposes of this Chapter:
(a) "CIF" means the value of the good imported, and includes the cost of freight and insurance up to the port or place of entry into the country of importation;
(b) "designated government authority" means the government authority of each Party that is responsible for the issuing of the Certificate of Origin in accordance with Article 33;
(c) "FOB" means the free-on-board value of the good, inclusive of the cost of transport to the port or site of final shipment abroad;
(d) "goods" shall include materials and products which can be wholly obtained or produced, or manufactured, even if they are intended for later use in another manufacturing operation;
(e) "materials" include raw materials, ingredients, parts, components, sub-components, sub-assembly or goods that are physically incorporated into another good or are subject to a process in the production of another good;
(f) "originating goods" mean goods that qualify as originating in accordance with Article 21;
(g) "preferential treatment" means the rate of customs duties applicable to an originating good of the country of an exporting Party in accordance with Article 14;
(h) "production" means methods of obtaining goods including growing, mining, harvesting, raising, breeding, extracting, gathering, collecting, capturing, fishing, trapping, hunting, manufacturing, producing, processing or assembling a good;

Article 21. Origin Criteria

1. For the purposes of this Agreement, goods imported by a Party, which are consigned directly within the meaning of Article 27 shall qualify as originating goods and be eligible for preferential treatment if they conform to the origin criteria under any one of the following:
(a) goods which are wholly obtained or produced in the territory of the country of the exporting Party as defined in Article 22; or
(b) goods otherwise deemed to be originating under Articles 23, 24 or 25. 2. Notwithstanding subparagraph (b) of paragraph 1 of this Article, for goods listed in Annex 2, Article 25 shall be solely applicable.

Article 22. Wholly Obtained or Produced Goods

The following goods shall be considered as wholly obtained or produced in the territory of the country of a Party:
(a) plants and plant products harvested, picked or gathered in the territory of the country of the Party;
(b) live animals born and raised in the territory of the country of the Party;
(c) goods obtained from live animals referred to in paragraph (b);
(d) goods obtained from hunting, trapping, fishing, aquaculture, gathering or capturing conducted in the territory of the country of the Party;
(e) minerals and other naturally occurring substances, not included in paragraphs (a) to (d), extracted or taken from the territory of the country of the Party;
(f) goods taken from the waters, seabed or beneath the seabed outside the territorial waters of the country of that Party, provided that country has the rights to exploit such waters, seabed and beneath the seabed in accordance with international law;
(g) goods of sea fishing and other marine goods taken from the high seas by vessels of the country of a Party or entitled to fly the flag of that country;
(h) goods processed or produced on board factory ships of the country of a Party or entitled to fly the flag of that country, exclusively from goods referred to in paragraph (g);
(i) articles collected in the territory of the country of the Party which can no longer perform their original purpose nor are capable of being restored or repaired and are fit only for disposal or recovery of parts of raw materials, or for recycling purposes; and
(j) goods obtained or produced in the territory of the country of a Party solely from goods referred to in paragraphs (a) to (i).

Article 23. Not Wholly Obtained or Produced Goods

1. A good shall be deemed to be originating if:
(a) not less than 40 per cent of its content originates from the country a Party; or
(b) the total value of the materials, parts or produce originating from outside of the territory of the country of a Party does not exceed 60 per cent of the FOB value of the good so produced or obtained; or
(c) the final good undergoes a change of tariff heading, where the Harmonized System classification of the final good is different from the Harmonized System classification of all non-originating or undetermined materials used in the production of such final good. For the purposes of this subparagraph, "change of tariff heading" means a change in tariff classification at the four digit level of the Harmonized System.
2. To be deemed as originating under paragraph 1 of this Article the final process of manufacturing shall be performed within the territory of the country of the exporting Party.
3. The originating criteria set out in subparagraphs (a) and (b) of paragraph 1 of this Article shall be referred to as the Malaysia-Pakistan Closer Economic Partnership Agreement content (hereinafter referred to as "the MPCEPA content"). The formula for calculating the MPCEPA content is as follows: Non-MPCEPA content: Value of Value of Non- MPCEPA + materials of Materials undetermined origin X 100 % ≤ 60%FOB Price Therefore, the MPCEPA content: 100% minus non-MPCEPA content (%)≥ 40% 4. The value of the non-originating materials shall be:
(a) the CIF value at the time of importation of the materials, parts or produce; or
(b) the earliest ascertained price paid for the materials, parts or produce of undetermined origin in the territory of the country of the Party where the production takes place.

Article 24. Cumulative Rule of Origin

Goods which satisfy the origin criteria under Article 21 and which are used in the territory of the country of a Party as material for a finished good, shall be deemed as goods originating in the territory of the country of the Party and eligible for preferential treatment under this Agreement where processing of the finished good has taken place, provided that in the final good the aggregate content (value of such inputs plus domestic value addition) is not less than 40 per cent.

Article 25. Product Specific Rules

Goods subject to and which satisfy the Product Specific Rules as specified in Annex 2 shall be deemed as originating and eligible for preferential treatment.

Article 26. Minimal Operations and Processes

The following operations or processes undertaken exclusively by itself or in combination shall be considered to be minimal and shall not be taken into account in determining the origin of goods under Article 23:
(a) preservation of products in good condition for the purposes of transport or storage;
(b) changes of packaging, or breaking-up and assembly of packages;
(c) simple cleaning, including removal of oxide, oil, paint or other coverings;
(d) simple painting and polishing operations;
(e) simple testing or calibration;
(f) husking, partial or total bleaching, polishing and glazing of cereals and rice;
(g) sharpening, simple grinding, slicing or simple cutting;
(h) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;
(i) affixing or printing marks, labels, logos and other like distinguishing signs on goods or their packaging;
(j) simple mixing of goods, whether or not of different kinds; or
(k) simple assembly of parts of products to constitute a complete good.

Article 27. Direct Consignment

An originating good shall be deemed as directly consigned from the country of the exporting Party to the country of the importing Party:
(a) if the goods are transported without passing through the territory of any third State; or
(b) if the goods are transported for the purpose of transit through third States with or without transhipment or temporary storage in such third States, provided that:
(i) the transit entry is justified for geographical reasons or transport requirements;
(ii) the goods have not entered into trade or consumption in the territory of the third State; and
(iii) the goods have not undergone any operation in the territory of the third State other than unloading and reloading or any operation required to keep the goods in good condition.

Article 28. Treatment of Packages, Packing Materials and Containers

1. If a good is subject to the value-added criterion provided in subparagraph (a) or (b) of paragraph 1 of Article 23 the value of the packages and packing materials for retail sale, shall be taken into account in determining the origin of that good, provided that the packages and packing materials are considered as forming a whole with the good;
2. If a good is subject to the change in tariff classification criterion provided in subparagraph (c) of paragraph 1 of Article 23, packages and packing materials classified together with the packaged product, shall not be taken into account in determining origin.
3. Packing materials and containers used exclusively for the transportation of a good shall not be taken into account in determining the origin of such good.

Article 29. Accessories, Spare Parts and Tools

The origin of accessories, spare parts, tools and instructional or other information materials presented with the goods shall not be considered in determining the origin of the goods, provided that such accessories, spare parts, tools and information materials are customary to such goods and are classified with the goods by the country of the importing Party.

Article 30. Indirect Materials

1. Any indirect material used in the production of a good shall be treated as originating, irrespective of whether such indirect material originates from a third State. The value of such indirect material shall be the cost registered in the accounting records of the producer of such good.
2. For the purposes of this Article, indirect materials include:
(a) fuel, energy, catalysts and solvents;
(b) equipment, devices and supplies used for testing or inspection of the goods;
(c) gloves, glasses, footwear, clothing, safety equipment and supplies;
(d) tools, dies and moulds;
(e) spare parts and materials used in the maintenance of equipment and buildings;
(f) lubricants, greases, compounding materials and other materials used in production or used to operate equipment and buildings; and
(g) any other material which are not incorporated into the good but whose use in the production of the good can reasonably be demonstrated to be a part of that production.

Article 31. Identical and Interchangeable Materials

The origin of identical or interchangeable materials, whether mixed or physically combined, used to manufacture a good may be determined in accordance with the generally accepted accounting principles of stock control or inventory management practiced in the country of the exporting Party.

Article 32. Certificate of Origin

A claim that goods are eligible for preferential treatment under this Agreement shall be supported by a Certificate of Origin in the prescribed form in Annex 3, issued by the designated government authority of the exporting Party.

Article 33. Operational Certification Procedure

For the purposes of implementing the rules of origin under this Chapter, the Operational Certification Procedures as set out in Annex 4 shall apply.

Chapter 4. Customs Procedures and Cooperation

Article 34. Definitions

For the purposes of this Chapter:
(a) "customs authority" means the authority that according to the legislation of the country of each Party is responsible for the administration and enforcement of its customs laws:
(i) in the case of Malaysia, the Royal Malaysian Customs, and
(ii) in the case of Pakistan, the Central Board of Revenue;
(b) "customs laws" means such laws and regulations administered and enforced by the customs authority of each Party concerning the importation, exportation, and transit of goods, relating to customs duties, charges, and other taxes, or to prohibitions, restrictions, and other similar controls with respect to the movement of controlled items across the boundary of the customs territory of each Party;
(c) "information" means any data, documents, reports and certified or authenticated copies thereof or other communications;
(d) "persons" means both natural and legal persons;
(e) "requesting authority" means the customs authority which requests assistance; and
(f) "requested authority" means the customs authority from which assistance is requested.

Article 35. Objectives

The objectives of this Chapter are to:
(a) simplify and harmonise customs procedures of the countries of the Parties;
(b) ensure consistency, predictability and transparency in the application of customs laws and regulations of the country of the Parties;
(c) ensure efficient and expeditious clearance of goods;
(d) facilitate trade in goods between the countries of the Parties;
(e) promote cooperation between the customs authorities; and
(f) exchange information relating to all customs matters.

Article 36. Scope and Coverage

1. This Chapter shall apply to customs procedures required for the clearance of goods traded between the countries of the Parties.
2. This Chapter shall be implemented by the Parties in accordance with the laws and regulations in force in the country of each Party and within the competence and available resources of the customs authorities.

Article 37. Transparency

1. Each Party shall ensure that all relevant information pertaining to its customs laws is easily accessible to the other Party.
2. At the request of either Party, the other Party shall endeavour to provide information relating to a specific customs matter raised by the other Party. Either Party may also supply other pertinent information relating to such customs matter which it considers that the other Party should be made aware of.

Article 38. Customs Clearance

1. The Parties shall endeavour to apply customs procedures in a predictable, consistent and transparent manner.
2. For prompt customs clearance of goods traded between the countries of the Parties, each Party shall:
(a) make use of information and communications technology;
(b) simplify its customs procedures;
(c) harmonise its customs procedures, as far as possible, with relevant international standards and best practices, such as those recommended by the World Customs Organization.

Article 39. Temporary Admission of Goods

1. Each Party shall facilitate temporary admission of goods in accordance with the international standards and practices.
2. 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 40. Cooperation and Capacity Building

1. The Parties shall cooperate and exchange information with each other on customs matters.
2. Bilateral cooperation shall include capacity building, such as training, technical assistance, exchange of experts and any other forms of cooperation, as may be mutually agreed upon by the Parties, for trade facilitation.
3. To the extent permitted by their national laws and regulations, the customs authorities shall assist each other in relation to:
(a) implementation and operation of this Chapter;
(b) facilitation of trade in goods between countries of the Parties;
(c) enforcement of prohibitions and restrictions on exports to and imports from their respective territories;
(d) cooperation in any other areas as may be mutually agreed upon by the Parties; and
(e) joint efforts to combat customs fraud.

Article 41. Mutual Assistance

1. The customs authority of a Party shall, to the extent possible, provide the customs authority of the other Party, upon request or on its own initiative, with information which helps to ensure proper application of customs laws and the prevention of violation or attempted violation of customs laws.
2. To the extent permitted by their customs laws, the customs authorities may provide each other with mutual assistance in order to prevent or investigate violations of customs law.
3. The request pursuant to paragraph 1 of this Article shall, wherever appropriate, specify:
(a) the verification procedures that the requesting authority has undertaken or attempted to undertake; and
(b) the specific information that the requesting authority requires, which may include:
(i) subject and reason for the request;
(ii) a brief description of the matter and the action requested; and
(iii) the names and addresses of the parties concerned with the proceedings, if known.

Article 42. Information on the Application and Enforcement of Customs Laws

The customs authorities shall exchange information on:
(a) new enforcement techniques proven to be effective;
(b) new trends, means or methods of committing violation or attempted violation of customs laws;
(c) goods known to be associated with the violation or attempted violation of customs laws, as well as transport and storage methods used for such goods;
(d) persons known to have committed or suspected of having violated or attempted violation of customs laws; and
(e) any other information that can assist the customs authorities of the Parties in using risk management for the purposes of appropriate customs control and facilitation of customs clearance of goods traded between the countries of the Parties.

Article 43. Information Relating to Import and Export

1. The requested authority shall, on request by the requesting authority, provide the requesting authority with information relating to:
(a) whether goods imported into the territory of the requesting authority have been lawfully exported from the territory of the requested authority; and
(b) whether goods exported from the territory of the requesting authority have been lawfully imported into the territory of the requested authority and whether the goods have been placed under any customs procedures.
2. The customs authorities shall, by mutual consent, cooperate by exchange of personnel between them in order to share best practices in the enforcement of customs laws.

Article 44. Assistance In the Assessment of Import or Export Duties and Taxes

1. The requested authority shall, on request by the requesting authority having reasons to believe that a customs offence has been committed in its territory, communicate available information which may help to ensure the proper assessment of import or export duties and taxes:
(a) in respect of the value of goods for customs purposes:
(i) the commercial invoices presented to the customs authority of the exporting or importing Party or copies of such invoices, whether certified or not by the customs authority, as the circumstances may require; and
(ii) a copy of the declaration of value made on exportation or importation of the goods in the country of the exporting or importing Party;
(b) in respect of the tariff classification of goods:
(i) analyses carried out by official authorities or laboratory services, if conducted in relation thereto, to enable the customs authorities to determine the tariff classification of the goods; and
(ii) the tariff description declared on importation or exportation; and
(c) in respect of the origin of goods, the declaration of origin made to the customs authorities at the time of importation or exportation.

Article 45. Information and Communications Technology

1. The Parties shall endeavour to establish an electronic data interchange to provide for bilateral exchange of information on trade between them or any customs matter.
2. The customs authorities of the Parties shall exchange information, including best practices, on the use of information and communications technology for the purpose of improving customs procedures.

Article 46. Risk Management

1. In order to facilitate customs clearance of goods traded between the countries of the Parties, the customs authorities shall continue to use risk management methodology.
2. The customs authorities shall exchange information, including best practices, on risk management techniques and other enforcement techniques.

Article 47. Enforcement Against Illicit Trafficking

The customs authorities shall, wherever possible, cooperate and exchange information in their enforcement against the trafficking of illicit drugs and other prohibited goods in their respective territories.

Article 48. Intellectual Property Rights

The customs authorities shall, wherever possible, cooperate and exchange information in their enforcement against importation and exportation of goods suspected of infringing intellectual property rights.

Article 49. Exchange of Information

1. Any information communicated under this Chapter shall be treated as confidential unless the requested authority consents in writing to the disclosure of such information.
2. The requested authority may limit the information communicated under this Chapter if the requesting authority is unable to give the assurance that the information is used solely for the purpose it was requested for.
3. If a requesting authority would be unable to comply with a similar request in case such a request was made by the requested authority, the requesting authority shall draw attention to that fact in its request. Execution of such a request shall be at the discretion of the requested authority.
4. Any information communicated under this Chapter shall be used only by the requesting authority, solely for the purpose of administrative assistance according to the terms set out in this Chapter.
5. Any information communicated under this Chapter, if required for use in criminal proceedings, shall be requested through the diplomatic channel or any other channel established in accordance with the laws and regulations of the country of the requested authority. The requested authority shall make its best efforts to respond promptly and favourably to meet any reasonable deadlines indicated by the requesting authority.
6. Notwithstanding the provisions of this Chapter, if the communication of any information requested under this Chapter is prohibited by the laws or regulations, considered to be incompatible or prejudicial to the national interest or national security of the country of the requested authority, the requested authority shall not be required to provide such information or may provide such information subject to any terms, conditions or limitations it may prescribe.
7. In the event of termination of this Agreement, the provisions of this Article, with the exception of paragraphs 2 and 3, shall continue to apply unless otherwise agreed by the Parties.

Article 50. Sub-committee on Customs Procedures

1. For the purposes of the effective implementation and cooperation of this Chapter, the functions of the Sub-Committee on Customs Procedures (hereinafter referred to in this Chapter as "the Sub-Committee") established in accordance with Article 9 shall be to:
(a) review the implementation and operation of this Chapter;
(b) identify areas to be improved for facilitating trade between the countries of the Parties;
(c) report the outcome of discussions of the Sub-Committee to the Joint Committee;
(d) implement decisions or proposals approved by the Joint Committee, in accordance with paragraph (c) or otherwise; and (e) carry out other functions as may be delegated by the Joint Committee.
2. The Sub-Committee shall be co-chaired by officials from the customs authorities of the Parties.
3. The Sub-Committee shall comprise officials from the customs authorities of the Parties. Other government officials of either Party with the necessary expertise relevant to the issues to be discussed may be included on an ad hoc basis. 4. The Sub-Committee may, by consensus, invite representatives of relevant entities other than the Parties with the necessary expertise relevant to the issues to be discussed to participate in the meetings of the Sub-Committee. 5. The Sub-Committee shall meet at such place and number of times as may be mutually agreed upon by the Parties.

Article 51. Publication and Enquiry Points

For the purposes of this Chapter, each Party shall:
(a) publish on the internet or in print form all statutory and regulatory provisions and procedures applicable or enforced by its customs authority; and
(b) designate one or more enquiry points to address enquiries from the other Party concerning customs matters, and shall make available on the Internet, or print form, information concerning procedures for making such enquiries.

Chapter 5. Trade Remedies

Article 52. Anti-dumping

Each Party shall retain its rights and obligations under Article VI of the GATT 1994 and the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement, as set out in the national legislations of both Parties.

Article 53. Subsidies and Countervailing Measures

Each Party shall retain its rights and obligations under Articles VI and XVI of the GATT 1994 and the Agreement on Subsidies and Countervailing Measures in Annex 1A to the WTO Agreement, as set out in the national legislations of the countries of the Parties.

Article 54. Bilateral Safeguard Measures

1. A Party (hereinafter referred to in this Article as "the affected Party") shall have the right to apply bilateral safeguard measures on an originating good of the country of the other Party if, as a result of the reduction or elimination of a customs duty in accordance with Article 14, such originating good is being imported into the territory of the country of a Party in such increased quantities, in absolute terms, or relative to domestic production and under such conditions as to cause serious injury or threat of serious injury to domestic industry producing a like or directly competitive good. The affected Party may:
(a) suspend the further reduction of any rate of customs duty on the originating good provided for under this Agreement; or
(b) increase the rate of customs duty on the originating good to a level not exceeding the most-favoured-nation applied rate of customs duty on the originating good in effect at the time the bilateral safeguard measure is taken.
2. The affected Party shall have the right to apply bilateral safeguard measures on an originating good within the transition period for that originating good. The transition period for a good shall begin from the date of entry into force of this Agreement and end five years from the date of completion of tariff reduction and, where relevant, elimination for that good.
3. In applying bilateral safeguard measures, the Parties shall adopt the rules for the application of safeguard measures, including provisional measures, as provided under the Agreement on Safeguards in Annex 1A to the WTO Agreement (hereinafter referred to as "the Agreement on Safeguards"), with the exception of the quantitative restriction measures set out in Article 5, and Articles 9, 12, 13 and 14 of the Agreement on Safeguards. As such, all other provisions of the Agreement on Safeguards shall, mutatis mutandis, be incorporated into and form an integral part of this Agreement.
4. Notwithstanding paragraph 3 of this Article, the following conditions and limitations shall apply to an investigation or a bilateral safeguard measure:
(a) The affected 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 or extend a bilateral safeguard measure.
(b) In making the notifications referred to in subparagraphs (ii) and (iii) of paragraph (a), the affected Party proposing to apply a bilateral safeguard measure shall provide the other Party with all pertinent information, which shall include:
(i) evidence of serious injury or threat thereof caused by the increased imports;
(ii) precise description of the originating good involved and the proposed bilateral safeguard measure; and
(iii) proposed date of introduction and expected duration. The affected Party proposing to apply a bilateral safeguard measure may be requested by the other Party to provide additional information as it may consider necessary and the affected Party shall respond accordingly. In the case of an extension of a bilateral safeguard measure, evidence that the industry concerned is adjusting shall also be provided.
(c) The affected Party proposing to apply or extend a bilateral safeguard measure shall provide adequate opportunity for prior consultations with the other Party as far in advance of taking or extending any such bilateral safeguard measure as practicable, with a view to reviewing the information arising from the investigation, exchanging views on the proposed bilateral safeguard measure and reaching an agreement on compensation set out in paragraph 8 of this Article.
(d) The provisions on notification in this Article shall not require any Party to disclose confidential information the disclosure of which would impede law enforcement or otherwise be contrary to the public interest or would prejudice the legitimate commercial interests of particular enterprises, public or private;
(e) The affected Party shall apply the bilateral safeguard measure only following an investigation by its competent authorities in accordance with Articles 3 and 4.2(a), (b) and (c) of the Agreement on Safeguards.
(f) An investigation shall be promptly terminated without any bilateral safeguard measure being applied if imports of the originating good represent less than 8 per cent of total imports.
(g) Investigations shall in all cases be completed within one year following the date of initiation of the investigation.
5. Any bilateral safeguard measure may be maintained for an initial period of up to two years and may be extended for a period not exceeding one year if it is determined pursuant to the procedures referred to in paragraph 4 of this Article that the bilateral safeguard measure continues to be necessary to prevent or remedy serious injury and to facilitate adjustment and that there is evidence that the domestic industry is adjusting. Notwithstanding the duration of a bilateral safeguard measure on the good, such a bilateral safeguard measure shall terminate at the end of the transition period for that good.
6. No bilateral safeguard measure shall be taken against a particular good while a global safeguard measure in respect of that good is in place. In the event that a global safeguard measure is taken in respect of a particular good, any existing bilateral safeguard measure which is taken against that good shall be terminated prior to the imposition of a global safeguard measure.
7. On the affected Party's termination of a bilateral safeguard measure on a particular good, the tariff rate for that good shall be the rate that would have been in effect in accordance with Article 14, but for the bilateral safeguard measure.
8. The affected Party proposing to apply a bilateral safeguard measure shall provide to the other Party mutually agreed adequate means of trade liberalising compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the bilateral safeguard measure. If the Parties are unable to agree on compensation within 30 days, the Parties shall seek the good offices of the Joint Committee to determine the substantially equivalent level of concessions to that existing under this Agreement between the affected Party applying the bilateral safeguard measure and the exporting Party which would be affected by such a bilateral safeguard measure prior to any suspension of equivalent concessions. This action shall be applied only for the minimum period necessary to achieve the substantially equivalent effects.
9. The right of suspension referred to in paragraph 8 of this Article shall not be exercised for the first one year that a bilateral safeguard measure is in effect, provided that the bilateral safeguard measure has been taken as a result of an absolute increase in import and that such a bilateral safeguard measure conforms to the provision of this Chapter.
10. Each Party shall entrust determinations of serious injury or threat thereof in safeguard investigation proceedings to a competent investigating authority, subject to review by judicial or administrative tribunals, to the extent provided by national laws and regulations. Negative injury determinations shall not be subject to modification, except by such review.
11. All official communications and documentations exchanged among the Parties and to the Joint Committee relating to any bilateral safeguard measures shall be in writing and shall be in the English language.

Article 55. Global Safeguard Measures

Each Party retains its rights and obligations under Article XIX of the GATT 1994 and the Agreement on Safeguards. Actions taken pursuant to Article XIX of the GATT 1994 and the Agreement on Safeguards shall not be subject to Chapter 12.

Chapter 6. Sanitary and Phytosanitary Measures

Article 56. Objectives

The objectives of this Chapter are to protect human, animal or plant life or health in the territory of the countries of the Parties, and to provide a framework to address any bilateral sanitary and phytosanitary matters so as to facilitate and increase trade between the countries of the Parties.

Article 57. Scope and Coverage

1. This Chapter applies to all sanitary and phytosanitary measures in the territories of the countries of the Parties that may, directly or indirectly, affect trade between the countries of the Parties.
2. For the purposes of this Chapter:
(a) "international standards, guidelines and recommendations" shall have the same meaning as in Annex A to the Agreement on the Application of Sanitary and Phytosanitary Measures in Annex 1A to the WTO Agreement (hereinafter referred to as "the SPS Agreement");
(b) "sanitary and phytosanitary measure" means any measure referred to in Annex A, paragraph 1 of the SPS Agreement; and
(c) "trade between the Parties" refers to the trade in goods produced, processed or manufactured in the territories of the countries of the Parties.
3. This Chapter does not apply to technical regulations, standards and conformity assessment procedures as defined in the Agreement on Technical Barriers to Trade in Annex 1A to the WTO Agreement (hereinafter referred to as the "TBT Agreement").

Article 58. General Provisions

1. The Parties affirm their existing rights and obligations with respect to each other under the SPS Agreement.
2. With the view to facilitating and increasing bilateral trade, the Parties shall seek to enhance their cooperation in the area of sanitary and phytosanitary measures and deepen their mutual understanding and awareness of their respective systems.
3. The Parties shall seek to identify initiatives for cooperation on regulatory issues, such as bilateral recognition of equivalence, harmonisation based on international standards, guidelines and recommendations, or other cooperative arrangements.

Article 59. Focal Points

1. To facilitate the implementation of this Chapter and cooperation between the Parties, each Party shall designate a focal point, who shall be responsible for coordinating all matters pertaining to this Chapter. The functions of the focal point shall include:
(a) monitoring the implementation and administration of this Chapter;
(b) enhancing communication between the Parties' agencies and ministries responsible for sanitary and phytosanitary matters and facilitate either Party's response to written requests for information or exchange of information from the other Party in print or in electronic media without undue delay;
(c) promptly addressing any bilateral sanitary and phytosanitary issues that either Party raises to enhance cooperation and consultations between the Parties to facilitate trade between the Parties;
(d) promoting the use of international standards, guidelines and recommendations by both Parties in their respective adoption and application of sanitary and phytosanitary measures; and
(e) reviewing the progress of addressing sanitary and phytosanitary matters that may arise between the Parties' agencies and ministries responsible for such matters.
2. The focal points shall carry out their functions through agreed communication channels such as telephone, fax, emails or post, whichever is most expedient in the discharge of their functions.
3. For the purposes of this Article, the focal points shall be: (a) in the case of Malaysia, the Secretary General of the Ministry of Agriculture and Agro-based Industry; and (b) in the case of Pakistan, the Secretary of the Ministry of Food, Agriculture and Livestock.

Article 60. Technical Working Group

1. Where a matter covered under this Chapter cannot be clarified or resolved through the focal points, the Parties may, with mutual consent, agree to establish a technical working group with a view to identifying a workable and practical solution that would facilitate trade. Where a Party declines a request from the other Party to establish such working group, it shall, upon request, explain its reasons to the other Party. Such working group shall comprise representatives of both Parties, responsible for sanitary and phytosanitary measures.
2. The proposals of the technical working group may form the basis for a Party to consider the request by the other Party for recognition of a specific sanitary and phytosanitary measure as equivalent to the other Party's corresponding sanitary and phytosanitary requirements.

Article 61. Dispute Settlement

1. Neither Party may have recourse to the dispute settlement mechanism provided for in Chapter 12 for any dispute or differences arising from this Chapter.
2. Any disputes or differences arising from this Chapter shall be settled amicably through consultation by the technical working group. In the event that this fails, such dispute or differences may be forwarded by either Party for consideration by the Joint Committee.

Article 62. Final Provision

Nothing in this Chapter shall limit the authority of a Party to determine the level of protection it considers necessary for the protection of, inter alia, human, animal or plant life or health. In determining such level of protection, each Party retains authority to interpret the laws, regulations and administrative provisions of its country.

Chapter 7. Technical Barriers to Trade

Article 63. Scope and Application

1. All terms concerning technical regulations, standards and conformity assessment procedures used in this Agreement shall have the meaning given in Annex 1 of the TBT Agreement.
2. The rights and obligations of the Parties in respect of technical regulations, standards and conformity assessment procedures shall be governed by the TBT Agreement.

Article 64. Technical Cooperation

1. The Parties shall encourage appropriate institutions in their jurisdiction to strengthen their technical cooperation aimed at achieving full and effective implementation of the TBT Agreement and with a view to increasing the mutual understanding of their respective systems and facilitating access to their respective markets. To this end, they shall encourage their competent authorities in the area of technical regulations, standards and conformity assessment procedures to cooperate in:
(a) reinforcing the role of international standards or national standards harmonised to international standards, as a basis for technical regulations;
(b) exchanging information on technical regulations and conformity assessments procedures;
(c) participating in multilateral and international fora on technical regulations, standards and conformity assessment procedures; and
(d) considering requests for implementation of any specific cooperation programme.

Article 65. International Standards

1. The Parties shall utilise either national standards harmonised to international standards or international standards as a basis for cooperation in technical regulations, standards and conformity assessment procedures.
2. In determining whether an international standard or recommendation within the meaning of Articles 2 and 5 and Annex 3 of the TBT Agreement exists, each Party shall apply the principles set out in Decisions and Recommendations adopted by the Committee since 1 January 1995, G/TBT/1/Rev.8, 23 May 2002, Section IX ("Decision of the Committee on Principles for the Development of International Standards, Guides and Recommendations with relation to Articles 2, 5 and Annex 3 of the TBT Agreement") issued by the World Trade Organisation Committee on Technical Barriers to Trade or any successor document.

Article 66. Conformity Assessment Procedures

Each Party shall utilise existing regional and international mutual recognition arrangements in relation to the acceptance of conformity assessment processes and procedures.

Article 67. Focal Point

For the purposes of this Chapter, each Party shall establish a focal point, with the objectives of:
(a) facilitating technical consultations on any issue relating to technical regulations, standards and conformity assessment procedures that a Party may raise;
(b) enhancing cooperation in the development and improvement of conformity assessment procedures;
(c) facilitating, where appropriate, cooperation between governmental regulatory authorities, accreditation agencies and conformity assessment bodies in the respective territories; and
(d) exchanging information on developments in national, regional and multilateral fora engaged in activities relating to standardisation, technical regulations, standards and conformity assessment procedures.

Chapter 8. Trade In Services

Article 68. Scope and Coverage

1. This Chapter shall apply to measures adopted or maintained by a Party affecting trade in services by service suppliers of the other Party.
2. This Chapter shall not apply to:
(a) services supplied in the exercise of governmental authority at the central, regional or local government levels; (b) any measure by a Party with respect to government procurement;
(c) subsidies or grants provided by a Party;
(d) in respect of air transport services, traffic rights, however granted, or services directly related to the exercise of traffic rights, except measures affecting:
(i) aircraft repair and maintenance services;
(ii) the selling and marketing of air transport services; and
(iii) computer reservation system services.
(e) cabotage in maritime transport services; and
(f) measures affecting natural persons seeking access to the employment market of a Party, or measures regarding citizenship, residence or employment on a permanent basis.
3. Nothing in this Chapter shall prevent a Party from applying measures to regulate the entry of natural persons of the country of the other Party into, or their temporary stay in, its country's territory, including those measures necessary to protect the integrity of, and to ensure the orderly movement of natural persons across its borders, provided that such measures are not applied in such a manner as to nullify or impair the benefits accruing to the other Party under the terms of this Chapter.

Article 98 shall apply, mutatis mutandis, to measures affecting the supply of service by a service supplier of the country of a Party through commercial presence in the territory of the other Party, regardless of whether or not such services sector is scheduled in a Party's Schedule of Specific Commitments in Annex 5. Note: The term "regional" refers to a state of Malaysia and a province of Pakistan.