3. The Parties understand that the GATT 1994 rights and obligations incorporated by paragraph 2 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 antidumping duty orders and undertakings;
(b) import licensing conditioned on the fulfillment of a performance requirement, except as provided in a Party's Schedule to Annex 3.03; 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.
4. In the event that a Party adopts or maintains a prohibition or restriction on the importation from or exportation to a non-Party of a good, nothing in this Agreement shall be construed to prevent the Party from:
(a) limiting or prohibiting the importation of goods to the non-Party from the territory of the other Party; or
(b) requiring as a condition of export of such goods of the Party to the territory of the other Party, that the goods not be re-exported to the non-Party, directly or indirectly, without being consumed in the territory of the other Party.
5. In the event that a Party adopts or maintains a prohibition or restriction on the importation of a good from a non-Party, the Party, on the request of the other Party, shall consult with a view to avoiding undue interference with or distortion of pricing, marketing or distribution arrangements in the other Party.
6. Paragraphs 2 through 4 shall not apply to the measures set out in Annex 3.03.7.
Article 3.12. Administrative Fees and Formalities
1. Each Party shall ensure, in accordance with Article VIII.1 of the GATT 1994 and its interpretative notes, that all fees and charges of whatever character (other than customs duties, charges equivalent to an internal tax or other internal charge applied consistently with Article III.2 of the GATT 1994, and antidumping and countervailing duties) imposed on or in connection with importation or exportation are limited in amount to the approximate cost of services rendered and do not represent an indirect protection to domestic products or a taxation of imports or exports for fiscal purposes.
2. No Party may require consular transactions, including related fees and charges, in connection with the importation of any good of the other Party.
3. Each Party shall make available and maintain through the Internet a current list of the fees and charges it imposes in connection with importation or exportation.
Article 3.13. Export Taxes
No Party may adopt or maintain any duty, tax, or other charge on the export of any good to the territory of the other Party, unless such duty, tax, or charge is adopted or maintained on any such good when the supply is insufficient for domestic consumption.
Article 3.14. Obligations Under Intergovernmental Agreement
Before adopting a measure consistent with an intergovernmental agreement on products in accordance with paragraph (h) in Article XX of GATT 1994, which may affect trade in basic commodity between the parties, a Party shall consult with the other party to avoid nullification or impairment of concessions granted by a Party in accordance with Article 3.03.
Article 3.15. Committee on Trade In Goods
1. The Parties hereby establish a Committee on Trade in Goods, comprised of representatives of each Party.
2. The Committee shall meet, on request of either Party or the Commission, to consider any matter arising from this Chapter, Chapter 4 (Rules of Origin and Related Customs Procedures), or Chapter 5 (Trade Facilitation).
3. The Committee's functions shall include:
(a) promoting trade in goods between the Parties, including through consultations on accelerating customs tariff reduction under this Agreement and other issues as considered appropriate; and
(b) addressing barriers to trade in goods between the Parties, especially those related to the application of non-tariff measures, and, if appropriate, submitting such matters to the Commission for its consideration.
Section D. Definitions
Article 3.16. Definitions
For purposes of this Chapter:
commercial samples of negligible value means commercial samples having a value, individually or as an aggregate shipment, of not more than one U.S. dollar, or the equivalent amount in the currency of the Party, or so marked, torn, perforated, or otherwise treated that they are unsuitable for sale or for use except as commercial samples;
consular transactions means requirements that goods of a Party intended for export to the territory of the other Party must first be submitted to the supervision of the consul of the importing Party in the territory of the exporting Party, for the purpose of obtaining consular invoices or consular visas for commercial invoices, certificates of origin, manifests, shippers' export declarations, or any other customs documentation required for or in connection with the import;
consumed means:
(a) actually consumed; or
(b) processed or manufactured in such a manner that it allows for substantial change in value, form, or use of the good or in the production of another good;
duty-free means free of customs duty;
export subsidies shall have the meaning assigned to that term in Article 1(e) of the WTO Agriculture Agreement, including any amendment to that article;
goods intended for display or demonstration includes their component parts, ancillary devices and accessories;
goods temporarily admitted for sporting purposes means sports equipment for use in sports contests or events, or training in the territory of the Party into which such goods are admitted;
printed advertising materials means those goods classified in Chapter 49 of the Harmonized System, including brochures, pamphlets, leaflets, trade catalogues, yearbooks published by trade associations, and tourist promotional materials and posters that are used to promote, publicize, or advertise a good or service, and are supplied free of charge;
temporary admission of goods means the temporary admission or temporary importation of goods or goods imported temporarily for repair or alteration.
Chapter 4. Rules of Origin and Related Customs Procedures
Section A. Rules of Origin
Article 4.01. Application and Interpretation Instruments
1. For purposes of this Chapter:
(a) the Harmonized System shall be the basis for the tariff classification of goods; and
(b) the principles and norms of the Customs Valuation Agreement shall be used to determine the value of a good or material.
2. For purposes of this Chapter, regarding the application of the Customs Valuation Agreement when determining the origin of a good:
(a) the principles and norms of the Customs Valuation Agreement shall be applied to domestic transactions as they would be applied to international transactions, with only the modifications required by circumstances; and
(b) the provisions contained in this Chapter shall prevail over the Customs Valuation Agreement to the extent of any inconsistency.
Article 4.02. Originating Goods
1. Except as otherwise provided in this Chapter, a good shall be considered originating in the territory of a Party where:
(a)it is wholly obtained or produced entirely in the territory of that Party;
(b) it is produced entirely in the territory of that Party exclusively from the originating materials;
(c) it is produced entirely in the territory of one or both of the Parties from non-originating materials that undergo a change in tariff classification, satisfy a regional value content or other requirements, as specified in Annex 4.02, and that the good complies with all other applicable provisions of this Chapter; or
(d) it is produced entirely in the territory of a Party, although one or more of the non-originating materials or parts provided for as parts under the Harmonized System that are used in the production of the good does not undergo a change in tariff classification for any of the following reasons:
(i) the good was imported into the territory of a Party in an unassembled or a disassembled form, and has been classified as an assembled good in accordance with the Rule 2(a) of the General Rules of Interpretation of the Harmonized System;
(ii) the good and its parts are classified under the same heading which describes specifically both the good itself and its parts, and that heading is not further divided into subheadings; or
(iii) the good and its parts are classified under the same subheading which describes specifically both the good itself and its parts;
provided that the regional value content of the good, determined in accordance with Article 4.06, is not less than thirty five percent (35%), and the good fulfills all other applicable requirements of this Chapter, unless the specific rule of origin applicable to the good pursuant to Annex 4.02, specifies a different requirement of regional value content, in which case that specific requirement shall be applied.
2. Notwithstanding other provisions of this Article, goods shall not be considered originating, if they are exclusively the outcome of the minimal operations or processes referred to in Article 4.03 and carried out in the territory of one or both of the Parties, unless the specific rules of origin of Annex 4.02 indicate otherwise.
Article 4.03. Minimal Operations or Processes
The minimal operations or processes that by themselves or in combination do not confer origin to a good are:
(a) operations for the preservation of a good in good condition during transportation or storage (such as aeration, ventilation, drying, refrigeration, freezing or keeping in brine);
(b) cleaning, washing, sieving, sifting, screening, selecting, classifying, grading or culling;
(c) peeling, hulling, stripping, husking, deboning, pressing, squeezing, filleting or soaking;
(d) elimination of dust or broken or damaged parts, application of oil, anti- oxidant paint or protective coating;
(e) testing or gauging, division of bulk shipments, bulking of packages, adhesion of brand names, labels or distinguishing signs on goods and their packaging;
(f) packing, unpacking or repacking;
(g) dilution in water or any other watery solution, or ionization and salting;
(h) simple putting together or assembly of parts of a good in order to constitute a complete good, the formation of sets and assortments of goods; and
(i) slaughter of animals. Article 4.04 Indirect Materials Indirect materials shall be considered as originating regardless to where there are produced or manufactured, and the value of these materials shall be the cost as registered in the accounting records of the producer of the good.
Article 4.05. Accumulation
1. The goods or materials originating from a Party and incorporated into a good in the territory of the other Party shall be considered as originating in the territory of that other Party.
2. A good is originating where the good is produced in the territory of one or both Parties by one or more producers, provided that the good satisfies the requirements in Article 4.02 and all other applicable requirements in this Chapter.
Article 4.06. Regional Value Content
1. The regional value content of a good shall be calculated according to the following formula:
RVC = [(TV - VNM) / TV] * 100
Where
RVC : is the regional value content, expressed as a percentage;
TV: is the transaction value of the good adjusted to an FOB basis, except as provided for in paragraph 2. If this value does not exist or cannot be determined in accordance with the principles and norms set forth in Article 1 of the Customs Valuation Agreement, it shall be calculated in accordance with the principles and norms set forth in Article 2 through 7 of said Agreement; and
VNM : is the transaction value of the non-originating materials adjusted to a CIF basis, except as provided for in paragraph 5. If such value does not exist or cannot be determined in accordance with the principles and norms set forth in Article 1 of the Customs Valuation Agreement, it shall be calculated in accordance with the principles and norms set forth in Articles 2 through 7 of said Agreement.
2. When the producer of a good does not export it directly, the value shall be adjusted to the point at which the buyer receives the good within the territory in which the producer is located.
3. When the origin is determined by the regional value content rule, the percentage required shall be specified in Annex 4.02.
4. All of the costs considered when calculating the regional value content shall be recorded and kept in accordance with Generally Accepted Accounting Principles applicable in the territory of the Party in which the good is produced.
5. When the producer of a good acquires a non-originating material in the territory of the Party in which it is located, the value of the non-originating material shall not include freight, insurance, costs of packaging and any other costs incurred in transporting the material from the supplier's warehouse to the place where the producer is located.
6. For purposes of calculating the regional value content, the value of the non- originating materials used in the production of a good shall not include the value of the non-originating materials used in the production of originating materials acquired and used in the production of that good.
Article 4.07. De Minimis
Except as provided in Annex 4.07, a good is nonetheless originating if the value of all non-originating materials used in the production of the good that does not undergo the applicable change in tariff classification does not exceed ten percent of the value of the good. The value of such non-originating material shall, however, be included in the value of non-originating materials for any applicable regional value content requirement and that the good satisfies all other applicable requirements in this Chapter.
Article 4.08. Fungible Goods and Materials
1. Each Party shall provide that the origin of fungible goods or materials used in the production of a good shall be determined by:
(a) physical segregation of each good or material; or
(b) at the producer's choice, through the use of any of the following inventory management methods, recognized in the Generally Accepted Accounting Principles of the Party in which the production is performed:
(i) first in first out (FIFO) method;
(ii) last in first out (LIFO) method; or
(iii) averaging method.
2. Once the inventory management method listed out in the preceding paragraph is selected, it shall be used during the entire period of a fiscal year.
Article 4.09. Accessories, Spare Parts and Tools
1. Each Party shall provide that a good's standard accessories, spare parts, or tools delivered with the good shall be treated as originating goods if the good is an originating good and shall be disregarded in determining whether all the non-originating materials used in the production of the good undergo the applicable change in tariff classification, provided that:
(a) the accessories, spare parts, or tools are classified with and not invoiced separately from the good; and
(b) the quantities and value of the accessories, spare parts, or tools are customary for the good.
2. If the good is subject to a regional value content requirement, the value of accessories, spare parts, or tools shall be taken into account as originating or non- originating materials, as the case may be, in calculating the regional value content of the good.
Article 4.10. Sets or Assortments
1. The sets or assortments of goods that are classified in accordance with rule 3 of the General Rules of the Interpretation of the Harmonized System, as well as goods whose description according to the nomenclature of the Harmonized System is specifically that of a set or assortment, shall qualify as originating, only if each good in the set or assortment complies with the rules of origin established in this Chapter and in Annex 4.02.
2. When sets or assortments are subject to regional value content requirements, their containers and packaging materials shall be considered originating or non- originating, as the case may be.
Article 4.11. Packaging Materials and Containers for Retail Sale
Each Party shall provide that packaging materials and containers in which a good is packaged for retail sale shall, if classified with the good, be disregarded in determining whether all the non-originating materials used in the production of the good undergo the applicable change in tariff classification set out in Annex 4.02 and, if the good is subject to a regional value content requirement, the value of such packaging materials and containers shall be taken into account as originating or non-originating materials, as the case may be, in calculating the regional value content of the good.
Article 4.12. Packing Materials and Containers for Shipment
Containers and packing materials in which the good is packed for shipment shall be disregarded in determining whether a good is originating.
Article 4.13. Transit and Transshipment
The originating goods of the other Party shall not lose such status 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 any operations other than unloading, reloading or any other operation to preserve them in good condition and remain under the control of customs authority in the territory of a non-Party mentioned above.
Section Section B: Customs Procedures Related to Origin
Article 4.14. Certificate of Origin
1. For purposes of this Chapter, the Parties shall establish a single form of Certificate of Origin as provided in Annex 4.14, which shall enter into force with this Agreement and may, thereafter, be modified by mutual agreement.
2. The Certificate of Origin referred to in paragraph 1 shall be used to certify that a good being exported from the territory of a Party into the territory of the other Party qualifies as originating and satisfy all other requirements established in this Chapter.
3. The certifying authorities of each Party shall require its exporters or producers to complete and sign a Certificate of Origin for every exportation of goods for which an importer of the other Party may claim preferential tariff treatment.
4. The exporter or producer completing and signing a Certificate of Origin shall assume administrative, civil or criminal liability whenever the exporter includes false or incorrect information in the Certificate of Origin.
5. The certifying authority of each Party shall certify that the Certificate of Origin filled and signed by the exporter or producer of the good is completed correctly, based on the information provided by such exporter or producer, and shall verify that the exporter or producer has indeed complied with the requirements of this Chapter and is located in the territory of that Party.
6. Each Party shall require the Certificate of Origin be sealed, signed and dated by the certifying authority of the exporting Party with respect to the exportation of a good for which the importer may claim preferential tariff treatment. The Certificate of Origin shall also carry a serial number allowing its identification, which will be managed by the certifying authority.
7. The certifying authority of the exporting Party shall:
(a) adopt or maintain the administrative procedures for certifying the Certificate of Origin that its producer or exporter filled and signed;
(b) provide, if requested by the competent authority of the importing Party, information about the origin of the imported goods claiming the preferential tariff treatment; and
(c) notify in writing before this Agreement enters into force, the list of the names of the authorized officials and, where applicable, the list of authorized agencies to certify the Certificate of Origin, with the corresponding signatures and seals. Modifications to this list shall be notified immediately in writing to the other Party and shall enter into force 30 days after the date on which that Party receives that notification of the modification.
8. Each Party shall provide that a Certificate of Origin shall only be applicable to a single importation of one or more goods into the territory of that Party.
9. Each Party shall provide that a valid Certification of Origin be accepted by the customs authority of the importing Party for a period of one year from the date on which the certificate was signed and sealed by the certifying authority.
10. Each Party shall provide that the preferential tariff treatment shall not be denied only because the good covered by a Certificate of Origin is invoiced by an enterprise located in the territory of a non-Party.
11. The Parties shall, in the second year from the date on which this Agreement entry into force, review the certifying procedures with a view to confirm whether it would be more beneficial to the Parties to convey to an auto-certification process, rather than requiring any agency to perform the certification. If it is agreed by both Parties, the exporter or producer will be the one responsible to certify the origin without the certifying agency of each Party being the one required to perform the certification.
Article 4.15. Obligations Regarding Importations
1. A Party shall require that the importer who claims preferential tariff treatment for a good imported into its territory from the territory of the other Party should:
(a) declare in writing in the importation document required by its legislation, based on a valid Certificate of Origin, that a good qualifies as an originating good;
(b) have the Certification of Origin in his possession at the time the declaration is made;
(c) provide, if requested by its customs authority, the Certificate of Origin or its copy ; and-
(d) promptly make a corrected declaration and pay any duties owing where the importer has reasons to believe that the Certificate of Origin on which a customs declaration was based contains incorrect information. Where the importer presents a corrected declaration before the customs authority notifies a revision process, according to the domestic laws of each Party, the importer may not be penalized.
2. A Party may deny preferential tariff treatment to a good if the importer fails to comply with any requirement in this Chapter.
3. A Party shall provide that, where a good was originating when it was imported into its territory, but the importer of the good did not make a claim for preferential tariff treatment at the time of importation that importer may, not later than four months from the date of the release of the imported good, request a refund of the tariff duties paid in excess as a result of not having requested the preferential tariff treatment for that good, provided that the importer has the Certificate of Origin in his/her possession and the request is accompanied by:
(a) a written declaration, indicating that the good qualifies as originating at the time of importation;
(b) the Certificate of Origin or its copy ; and
(c) any other documentation related to the importation of the good, as the customs authority may require.
4. Compliance with the provisions of previous paragraphs of this Article does not exempt the importer from the obligation to pay the corresponding customs duties according to the applicable laws of the importing Party, when the competent authority of that Party conclude an origin verification and determines to deny the preferential tariff treatment to goods imported, according to Article 4.19
Article 4.16. Obligations Regarding Exportations
1. Each Party shall require its exporter or producer that has filled and signed a Certificate of Origin to submit a copy of such Certificate to its competent authority upon request.
2. Each Party shall require its exporter or producer, that has completed and signed a Certificate of Origin or provided information for his/her certifying authority, and has reasons to believe that such Certificate contains incorrect information, to notify promptly in writing:
(a) all persons who have received that Certificate; and
(b) its certifying authority,
of any change that may affect the accuracy or validity of that Certificate, in such case the exporter or producer may not be penalized for having provided an incorrect certificate or information according to domestic laws of each Party.
3. Each Party shall require that if a false Certificate or information provided by its exporter or producer results in the good being exported to the territory of the other Party qualified as originating, such exporter or producer shall be subject to similar penalties as would apply to an importer in its territory for violating its customs laws and regulations by making false declarations or statements.
4. The certifying authority of the exporting Party shall provide the competent authority of the importing Party with the notification referred to in paragraph 2.
Article 4.17. Records
1. Each Party shall provide that:
(a) its exporter or producer who requests a Certificate of Origin and provides information for its certifying authority shall maintain, for at least five years from the date on which the Certificate is signed, all records and documents related to the origin of the goods, including those concerning:
(i) the purchase, costs, value, and payment of the good exported from its territory,
(ii) the purchase, costs, value and payment of, all materials, including indirect ones, used in the production of the good exported from its territory, and