2. originating in the European Community or in the SADC EPA States.
Article 21. Rules of Origin
1. For the purposes of this Chapter, "originating" means qualifying under the rules of origin set out in Protocol 1.
2. Within the first three years of the entry into force of this Agreement, the Parties shall review the provisions of Protocol 1, with a view to further simplifying the concepts and methods used for the purpose of determining origin. In such review the Parties shall take into account the development of technologies, production processes and all other factors, including on-going reforms of rules of origin, which may require modifications to the provisions of this Protocol. Any such modifications shall be effected by a decision of the Joint Council as defined in Article 93.
3. Particular attention shall be given to these provisions within the framework of the review foreseen in paragraph 2.
Article 22. Customs Duties
1. A customs duty includes any duty or charge of any kind imposed on, or in connection with, the importation of goods, including any form of surtax or surcharge, but does not include:
(a) internal taxes or other internal charges imposed consistently with Article III of GATT 1994;
(b) any antidumping, countervailing or safeguard measure imposed consistently with Title II;
(c) fees and charges for consular services imposed consistently with paragraph 2; and
(d) fees or other charges imposed consistently with paragraph 2.
2. Fees and charges referred to in paragraph 1(c) and (d) shall be limited in amount to the approximate cost of services rendered and shall not represent indirect protection for domestic products or a taxation of imports for fiscal purposes. They shall be based on specific rates that correspond to the real value of the service rendered.
3. For each product the basic duty, to which the successive reductions set out in the Agreement are to be applied, shall be the most-favoured-nation (hereinafter referred to as "MFN") rate of duty effectively applied at the day of entry into force of this Agreement.
4. In cases where the process of tariff dismantlement does not start at the entry into force of this Agreement the duty to which the successive reductions are to be applied shall be either the basic duty referred to in paragraph 3 of this Article, or the duty applied on an erga omnes basis on the starting day of the relevant tariff dismantlement schedule, whichever is the lower.
5. The reduced duties calculated in accordance with the reduction schedules contained in this Agreement shall be applied rounded to the first decimal place or, in case of specific duties, to the second decimal place.
Article 23. Standstill
No new customs duties shall be introduced, nor shall those already applied be increased in trade between the Parties as from the entry into force of this Agreement for all products subject to liberalisation.
Article 24. Duties, Taxes or other Fees and Charges on Exports
1. No new customs duties on exports or charges having equivalent effect shall be introduced, nor shall those already applied be increased, in the trade between the European Community and the SADC EPA countries from the date of entry into force of this Agreement.
2. In exceptional circumstances where the SADC EPA States can justify specific revenue needs, protection of infant industries, or protection of the environment, these SADC EPA States may introduce, after consultation with the EC Party, temporary export taxes or charges having equivalent effect on a limited number of additional products.
3. The Parties agree to review the provisions of this Article in the Joint Council no later than three years after the entry into force of this Agreement, taking fully into account their impact on development and diversification of the SADC EPA States' economies.
Article 25. Customs Duties on Products Originating In the Sadc Epa States
1. The EC Party shall provide duty free, quota free (DFQF) treatment for all products, except those referred to in paragraph 3, falling within the scope of this Agreement and originating in Botswana, Lesotho, Mozambique, Namibia and Swaziland.
2. Customs duties on imports of products originating in the SADC EPA States shall be reduced or eliminated in accordance with the provisions set out in Annex 1.
3. Imports of products as defined in the Annex 2 will be subject to the transitional regime set out therein.
Article 26. Customs Duties on Products Originating In the Ec
1. Products originating in the EC Party shall be imported into Botswana, Lesotho, Namibia and Swaziland in accordance with the treatment described in Annex 3.
2. Imports of products originating in the EC Party shall be imported into Mozambique in accordance with the treatment described in Annex 4.
3. The Parties agree to merge the two above annexes into a single SADC EPA tariff schedule at the time of Mozambique's introduction of the HS 2007. The merger shall be made effective by a decision of the Joint Council.
Article 27. Free Circulation of Goods
1. Customs duties shall be levied only once for goods originating in the EC Party or in the SADC EPA States in the territory of the other Party.
2. Any duty paid upon importation into an SADC EPA State shall be refunded fully when the goods are re-exported from the customs territory of the SADC EPA State of first importation. Such products shall then be subject to the duty in the country of consumption.
3. The Parties agree to cooperate with a view to facilitating the circulation of goods and simplifying customs procedures.
Article 28. More Favourable Treatment Resulting from Free Trade Agreements
1. With respect to the subject matter covered by this Chapter, the EC Party shall accord to SADC EPA States any more favourable treatment applicable as a result of the EC Party becoming party to a free trade agreement with third parties after the signature of this Agreement.
2. With respect to the subject matter covered by this Chapter, the SADC EPA States shall accord to the EC Party any more favourable treatment applicable as a result of the SADC EPA States or any Signatory SADC EPA State becoming party to a free trade agreement with any major trading economy after the signature of this Agreement.
3. Where an SADC EPA State can demonstrate that it has been given by a third Party substantially more favourable treatment than that offered by the EC Party, the Parties will consult and jointly decide how best to implement the provisions of paragraph 2.
4. The provisions of this Chapter shall not be so construed as to oblige the EC Party or any SADC EPA State to extend reciprocally any preferential treatment applicable as a result of the EC Party or any SADC EPA State being party to a free trade agreement with third parties on the date of signature of this Agreement.
5. For the purposes of this Article, "major trading economy" means any developed country, or any country accounting for a share of world merchandise exports above 1 percent in the year before the entry into force of the economic integration agreement referred to in paragraph 2, or any group of countries acting individually, collectively or through an economic integration agreement accounting collectively for a share of world merchandise exports above 1,5 percent in the year before the entry into force of the economic integration agreement referred to in paragraph 2.
Article 29. Special Provisions on Administrative Cooperation
1. The Parties agree that administrative cooperation is essential for the implementation and the control of the preferential treatment granted under this Title and underline their commitment to combat irregularities and fraud in customs and related matters.
2. The Parties also agree to cooperate in ensuring that the necessary institutional structures enable the responsible authorities to effectively respond to requests for assistance in a timely manner.
3. For the purpose of this Article and without prejudice to Article 9 of Protocol 2, a failure to provide administrative cooperation shall mean, inter alia:
(a) a repeated failure to respect the obligations to verify the originating status of the product(s) concerned as provided for in Article 34 of Protocol 1;
(b) a repeated refusal or undue delay in carrying out and/or communicating the results of subsequent verification of the proof of origin as provided for in Article 34 of Protocol 1;
(c) a repeated refusal or undue delay in obtaining authorisation to conduct administrative cooperation missions to verify the authenticity of documents or accuracy of information relevant to the granting of the preferential treatment in question as provided for in Article 7 of Protocol 2.
4. For the purpose of this Article a finding of irregularities or fraud may be made, inter alia, where there is a rapid increase, without legitimate explanation, in imports of goods exceeding the usual level of production and export capacity of the other Party that is linked to objective information concerning irregularities or fraud.
5. Where a Party or an SADC EPA State, as the case may be, has made a finding, on the basis of objective information, of a failure to provide administrative cooperation and/or of irregularities or fraud, the Party concerned may, in exceptional circumstances, temporarily suspend the relevant preferential treatment of the product(s) concerned, and of their specific origin concerned in accordance with this Article. For the purposes of this Article, exceptional circumstances mean those circumstances which have or might have a significant negative effect on a Party or an SADC EPA State, as the case may be, if a relevant preferential treatment of the product(s) concerned is to be continued.
6. The application of a temporary suspension shall be subject to the following conditions:
(a) The Party or SADC EPA State, as the case may be, which has made a finding, on the basis of
Objective information, of a failure to provide administrative cooperation and/or of irregularities or fraud shall without undue delay notify the Trade and Development Committee of its finding together with the objective information and enter into consultations within the Trade and Development Committee, on the basis of all relevant information and objective findings, with a view to reaching a solution acceptable to both Parties.
(b) Where the Parties have entered into consultations within the Trade and Development Committee as provided for above and have failed to agree on an acceptable solution within three months following the notification, the Party or SADC EPA State concerned, as the case may be, may temporarily suspend the relevant preferential treatment of the product(s) concerned, and of the specific origin concerned. A temporary suspension shall be notified to the Trade and Development Committee without undue delay.
(c) Temporary suspensions under this Article shall be limited to those necessary to protect the financial interests of the Party or SADC EPA State concerned. They shall not exceed a period of six months, which may be renewed. Temporary suspensions shall be notified immediately after their adoption to the Trade and Development Committee. They shall be subject to periodic consultations within the Trade and Development Committee in particular with a view to their termination as soon as the conditions for their application are no longer given.
Article 30. Management of Administrative Errors
The Parties recognise each other's right to correct administrative errors during the implementation of this Agreement. Where errors are identified either Party may request the Trade and Development Committee to examine the possibilities of adopting all appropriate measures with a view to resolving the situation.
Article 31. Customs Unions and Free-trade Areas
1. This Agreement shall not preclude the maintenance or establishment of customs unions, free-trade areas or other arrangements between either of the Parties and third countries, except in so far as they alter the rights and obligations provided for in this Agreement.
2. Consultation between the EC Party and the SADC EPA States shall take place within the Joint Council concerning agreements establishing or adjusting customs unions or free-trade areas and, where required, on other major issues related to their respective trade policy with third countries.
Chapter 5.
Article 32. Anti-dumping and Countervailing Measures
The rights and obligations of the EC Party or the SADC EPA States in respect of the application of antidumping or countervailing measures shall be governed by the relevant WTO Agreements. Any disputes related to these measures can only be settled through WTO Dispute Settlement procedures.
Article 33. Multilateral Safeguards
1. Subject to the provisions of this Article, nothing in this Agreement shall prevent the SADC EPA States and the EC Party from adopting measures in accordance with Article XIX of GATT 1994, the WTO Agreement on Safeguards, Article 5 of the Agreement on Agriculture annexed to the Marrakech Agreement Establishing the World Trade Organisation and any other relevant WTO Agreements.
2. Notwithstanding paragraph 1, the EC Party shall, in the light of the overall development objectives of this Agreement and the small size of the economies of the SADC EPA States, exclude imports from any SADC EPA State from any measures taken pursuant to Article XIX of GATT 1994, the WTO Agreement on Safeguards and Article 5 of the Agreement on Agriculture.
3. The provisions of paragraph 2 shall apply for a period of five years, beginning from the date of entry into force of the Agreement. Not later than 120 days before the end of this period, the Joint SADC EPA States-EC Council shall review the operation of those provisions in the light of the development needs of the SADC EPA States, with a view to determining whether to extend their application for a further period.
4. The provisions of paragraph 1 shall not be subject to the Dispute Settlement provisions of this Agreement.
Article 34. Bilateral Safeguard
1. Notwithstanding Article 33, after having examined alternative solutions, a Party may apply safeguard measures of limited duration which derogate from the provisions of Articles 25 and 26, under the conditions and in accordance with the procedures laid down in this Article.
2. Safeguard measures referred to in paragraph 1 of this Article may be taken where a product originating in one Party is being imported into the territory of the other Party in such increased quantities and under such conditions as to cause or threaten to cause:
(a) serious injury to the domestic industry producing like or directly competitive products in the territory of the importing Party, or
(b) disturbances in a sector of the economy producing like or directly competitive products, particularly where these disturbances produce major social problems, or difficulties which could bring about serious deterioration in the economic situation of the importing Party, or
(c) disturbances in the markets of like or directly competitive agricultural products (1) or mechanisms regulating those markets.
3. Safeguard measures referred to in this Article shall not exceed what is necessary to remedy or prevent serious injury or disturbances, as defined in paragraph 2 of this Article.
For the purpose of this Article agricultural products are those covered by Annex I of the WTO Agreement on Agriculture.
4. Those safeguard measures which may be taken by the importing Party may only consist of one or more of the following:
(a) suspension of the further reduction of the rate of import duty for the product concerned, as provided for under thi s Agreement; or
(b) increase in the customs duty on the product concerned up to a level which does not exceed the WTO bound rate of duty; or
(c) introduction of tariff quotas on the product concerned.
5. Without prejudice to paragraphs 1, 2 and 3 of this Article, where any product originating in one or more SADC EPA States is being imported in such increased quantities and under such conditions as to cause or threaten to cause one of the situations referred to under 2(a), (b) and (c) of this Article to a like or directly competitive production sector of one or several of the EC Party's outermost regions, the EC Party may take surveillance or safeguard measures limited to the region or regions concerned in accordance with the procedures laid down in paragraphs 6 to 9.
6. (a) Without prejudice to paragraphs 1, 2 and 3 of this Article, where any product originating in the EC Party is being imported in such increased quantities and under such conditions as to cause or threaten to cause one of the situations referred to under paragraph 2(a), (b) and (c) of this Article to an SADC EPA State, the SADC EPA State concerned may take surveillance or safeguard measures limited to its territory in accordance with the procedures laid down in paragraphs 7 to 10 of this Article.
(b) An SADC EPA State may take safeguard measures as provided for in paragraph 2 of this Article, where a product originating in the EC Party as a result of the reduction of duties is being imported into its territory in such increased quantities and under such conditions as to cause or threaten to cause disturbances to an infant industry producing like or directly competitive products. Such provision is applicable for a period of 12 years for Botswana, Namibia and Swaziland or 15 years for LDCs from the date of entry into force of this Agreement. This application period can be further extended on review by the Joint Council, in view of the overall level of development achieved by the SADC EPA States. Measures must be taken in accordance with the procedures laid down in paragraphs 6 to 9 of this Article.
7. (a) Safeguard measures referred to in this Article shall only be maintained for such a time
As may be necessary to prevent or remedy serious injury or disturbances as defined in paragraphs 2, 5 and 6 of this Article.
(b) Safeguard measures referred to in this Article shall not be applied for a period exceeding two years. Where the circumstances warranting imposition of safeguard measures continue to exist, such measures may be extended for a further period of no more than two years. Where one or more SADC EPA States apply a safeguard measure, or where the EC Party applies a measure limited to the territory of one or more of its outermost regions, they may however apply that measure for a period not exceeding four years and, where the circumstances warranting the imposition of safeguard measures continue to exist, extend it for a further period of four years.
(c) Safeguard measures referred to in this Article that exceed one year shall contain clear elements progressively leading to their elimination at the end of the set period, at the latest.
(d) No safeguard measure referred to in this Article shall be applied to the import of a product that has previously been subject to such a measure, within a period of at least one year from the expiry of the measure.
8. For the implementation of the above paragraphs, the following provisions shall apply:
(a) Where a Party takes the view that one of the circumstances set out in paragraphs 2, 5 and/or 6 exists, it shall immediately refer the matter to the Trade and Development Committee for examination.
(b) The Trade and Development Committee may make any recommendation needed to remedy the circumstances which have arisen. If no recommendation has been made by the Trade and Development Committee aimed at remedying the circumstances, or no other satisfactory solution has been reached within 30 days of the matter being referred to the Trade and Development Committee, the importing Party may adopt the appropriate measures to remedy the circumstances in accordance with this Article.
(c) Before taking any measure provided for in this Article or, in the case to which paragraph 9 of this Article applies, as soon as possible, the Party or the SADC EPA State concerned shall supply the Trade and Development Committee with all relevant information required for a thorough examination of the situation, with a view to seeking a solution acceptable to the parties concerned.
(d) In the selection of safeguard measures pursuant to this Article, priority must be given to those which least disturb the operation of this Agreement.
(e) Any safeguard measure taken pursuant to this Article shall be notified immediately to the Trade and Development Committee and shall be the subject of periodic consultations within that body, particularly with a view to establishing a timetable for its abolition as soon as circumstances permit.
9. In critical circumstances where delay would cause damage which would be difficult to repair, the importing Party concerned, whether the EC Party, or one or more SADC EPA States as the case may be, may take the measures provided for in paragraphs 3, 5 and/or 6 on a provisional basis without complying with the requirements of paragraph 8. Such action may be taken for a maximum period of 180 days where measures are taken by the EC Party and 200 days where measures are taken by one or more SADC EPA States as the case may be, or where measures taken by the EC Party are limited to the territory of one or more of its outermost region(s). The duration of any such provisional measure shall be counted as a part of the initial period and any extension referred to in paragraph 6. In the taking of such provisional measures, the interest of all parties involved shall be taken into account. The importing Party concerned shall inform the other Party concerned and it shall immediately refer the matter to the Trade and Development Committee for examination.
10. If an importing Party subjects imports of a product to an administrative procedure having as its purpose the rapid provision of information on the trend of trade flows liable to give rise to the problems referred to in this Article, it shall inform the Trade and Development Committee without delay.
11. Safeguard measures adopted under the provisions of this Article shall not be subject to WTO Dispute Settlement provisions.
Chapter 6. Non-tariff Measures
Article 35. Prohibition of Quantitative Restrictions
All prohibitions or restrictions applying to the import or export of goods between the Parties, other than customs duties and taxes, and fees and other charges provided for under Article 22 of this Agreement, whether made effective through quotas, import or export licenses or other measures, shall be eliminated upon the entry into force of this Agreement, unless justified under the exceptions of Article XI of GATT 1994. No new such measures shall be introduced. The provisions of this Article shall be without prejudice to the provisions of Article 32, Title II, on anti-dumping and countervailing measures.
Article 36. National Treatment on Internal Taxation and Regulation
1. Imported products originating in the other Party shall not be subject, either directly or indirectly, to internal taxes or other internal charges of any kind in excess of those applied, directly or indirectly, to like national products. Moreover, the Parties and the SADC EPA States shall not otherwise apply internal taxes or other internal charges so as to afford protection to national production.
2. Imported products originating in the other Party shall be accorded treatment no less favourable than that accorded to like national products in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use. The provisions of this paragraph shall not prevent the application of differential internal transportation charges which are based exclusively on the economic operation of the means of transport and not on the nationality of the product.
3. No Party or SADC EPA State shall establish or maintain any internal quantitative regulation relating to the mixture, processing or use of products in specified amounts or proportions which requires, directly or indirectly, that any specified amount or proportion of any product which is the subject of the regulation must be supplied from domestic sources. Moreover, no Party or SADC EPA State shall otherwise apply internal quantitative regulations so as to afford protection to national production.
4. The provisions of this Article shall not prevent the payment of subsidies exclusively to national producers, including payments to national producers derived from the proceeds of internal taxes or charges applied consistently with the provisions of this Article and subsidies effected through governmental purchases of national products.
Chapter 7. Customs and Trade Facilitation
Article 37. Objectives
The objectives of the Parties in this Chapter are to:
1. reinforce cooperation in the area of customs and trade facilitation with a view to ensuring that the relevant legislation and procedures, as well as the administrative capacity of the customs authorities, fulfil the objectives of effective control and the promotion of trade facilitation;
2. promote harmonisation of customs legislation and procedures;
3. ensure that legitimate public policy objectives, including those related to security and the prevention of fraud in the area of customs and trade facilitation shall not be compromised in any way; and
4. provide the necessary support for SADC EPA States customs administrations to effectively implement this Agreement.
Article 38. Customs and Administrative Cooperation
1. In order to ensure compliance with the provisions of this Title and effectively respond to the objectives laid down in Article 37, the Parties shall:
(a) exchange information on customs legislation and procedures;
(b) jointly develop initiatives relating to customs and trade facilitation and the strengthening of administrative capacity;
(c) exchange experience and best practices on combating corruption and fraud in matters relating to this Chapter;
(d) exchange experience and best practices on issues relating to import, export and transit procedures and on issues relating to improving services to the business community;
(e) exchange experience and best practices on facilitating transit;
(f) facilitate the exchange of experts between customs administrations; and
(g) promote coordination between all related agencies, both internally and across borders.
2. The EC Party and SADC EPA States will prepare and develop an enhanced cooperation on the implementation of the World Customs Organisation Framework of Standards to Secure and Facilitate Global Trade. The conditions, as stipulated by the World Customs Organisation, will have to be met and in particular the relevant legislation and measures in this area will have to be implemented in the EC Party and in the said SADC EPA States. This cooperation shall include initiatives aimed at working towards the mutual recognition of the Authorised Economic Operator (AEO) status and the exchange of advance information to allow an effective risk assessment and management for security purposes.
3. Notwithstanding paragraphs 1 and 2, the Parties shall provide mutual administrative assistance in customs matters in accordance with the provisions of Protocol 2 on Mutual Administrative Assistance in Customs Matters.
Article 39. Customs and Legislative Procedures
1. The Parties agree that their respective trade and customs legislation and procedures shall be based on:
(a) the revised Kyoto Convention on the Simplification and Harmonisation of Customs Procedures, the substantive elements of the World Customs Organisation Framework of Standards to Secure and Facilitate Global Trade, the International Convention on the Harmonised System and other international instruments and standards applicable in the field of customs and trade;
(b) the need to protect and facilitate legitimate trade;
(c) the need to avoid unnecessary and discriminatory burdens on economic operators, the need to safeguard against fraud and corruption and the need to provide further facilitation for operators that meet a high level of compliance;
(d) the need for each Party to apply a single administrative document or electronic equivalent;
(e) the application of modern customs techniques, including risk assessment, simplified procedures for entry and release of goods, post release controls, and company audits;
(f) transparency, efficiency and proportionality, in order to reduce costs and increase predictability for economic operators;
(g) the need for non-discrimination in terms of requirements and procedures applicable to import, export and goods in transit, though it is accepted that consignments might be treated differently according to objective risk assessment criteria;
(h) the progressive development of systems, including those based upon information technology, for both export and import operations, to facilitate the exchange of information between economic operators, customs administrations and other agencies;
(i) the adoption of systems that facilitate the importation of goods through the use of simplified customs procedures and processes, including pre-arrival clearance;
(j) the elimination of any requirements for the mandatory use of pre-shipment inspections as defined by the WTO Agreement on Pre-shipment Inspection, or their equivalent;
(k) the application of rules that ensure that any penalties imposed for minor breaches of customs regulations or procedural requirements are proportionate and, in their application, do not give rise to undue delays in customs clearance;
(l) a system of binding advance rulings on customs matters, notably on tariff classification and rules of origin, in accordance with rules laid down in their respective legislation;
(m) the facilitation of transit movements;
(n) the elimination of all requirements for the mandatory use of customs brokers; and
(o) transparent, non-discriminatory and proportionate rules in respect of the licensing of customs brokers.
2. In order to improve working methods and to ensure transparency and efficiency of customs
Operations, the Parties shall:
(a) ensure that the highest standards of integrity are maintained, through the application of anti corruption measures in this field;
(b) take further steps towards the reduction, simplification and standardisation of data in the documentation required by customs and other related agencies;
(c) simplify requirements and formalities wherever possible, in respect of the rapid release and clearance of goods;
(d) provide effective, prompt and non-discriminatory procedures enabling the right of appeal against customs and other agency administrative actions, rulings and decisions affecting imports, exports or goods in transit. The procedures for appeal shall be easily accessible to all including small and medium enterprises; and
(e) create the environment for the effective enforcement of legislative requirements.
Article 40. Facilitation of Transit Movements
1. The Parties or the SADC EPA States, as the case may be, shall ensure freedom of transit through their territory via the route most convenient for transit. Any controls or requirements must be non-discriminatory, proportionate and applied uniformly.
2. Without prejudice to legitimate customs control, the Parties shall accord to traffic in transit treatment no less favourable than that accorded to domestic goods, exports and imports, and their movement.
3. The Parties or the SADC EPA States, as the case may be, shall operate bonded transport regimes that allow the transit of goods without payment of duties or other charges, subject to the provision of an appropriate guarantee.