5. Ifno reply is received within 6 months, or if the reply does not contain sufficient information to determine the authenticity of the documents or the originating status of the products concerned, the requesting customs authority may refuse preferential tariff treatment.
6. The exporter, producer or manufacturer, who requested the Certificate of Origin related to the goods in question, shall not deny any request for a verification visit agreed to by the Parties. Any failure to consent to a verification visit shall be liable for the denial of the preferential benefits requested pursuant to this Agreement.
Article 4.19. Denial of Preferential Tariff Treatment
Except as otherwise provided in this Chapter, the importing Party may deny the claim for preferential tariff treatment if:
(a) the goods do not meet the requirements of this Chapter,
(b) the importer, exporter or producer does not comply with the relevant requirements of this Chapter,
(c) the Certificate of Origin does not comply with the requirements of this Chapter, or
(d) in the case stipulated in Article 4.18 (Verification of Origin).
Article 4.20. Electronic Source Data Exchange System
For the purposes of the effective and efficient implementation of this Chapter, both Parties may establish an Electronic Origin Data Exchange System to ensure the real-time exchange of origin-related information between customs administrations within a mutually agreed time frame.
Article 4.21. Rules of Origin Committee
1. The Parties establish a Rules of Origin Committee under the Free Trade Commission, composed of government representatives of each Party.
2. The Committee shall meet as necessary to consider any matters arising under this Chapter, including but not limited to disputes regarding the verification procedures of Article 4.18 (Verification of Origin) between competent authorities or customs authorities and questions relating to the interpretation of this Chapter, and shall consult regularly to ensure that this Chapter is administered in an effective, uniform and consistent manner to achieve the objectives of this Agreement.
Article 4.22. Points of Contact
1. Each Party shall designate a point of contact to facilitate communications between the Parties on any matter covered by this Chapter.
2. Each Party shall notify the other Party in writing of its designated point of contact no later than 60 days after the date of entry into force of this Agreement.
3. A Party shall promptly notify the other Party of any change of its point of contact or of the details of the relevant officials.
Chapter 5. Customs Procedures and Trade Facilitation
Article 5.1. Definitions
For the purposes of this chapter:
customs administration means:
(a) for China, the General Administration of Customs of the People's Republic of China; and
(b) for Ecuador, the National Customs Service of Ecuador.
customs legislation means the legal and regulatory provisions relating to the import, export, movement or storage of goods, the administration and enforcement of which are the responsibility of the customs administration, and any regulations adopted by the customs administration by virtue of its legal powers;
Customs procedures means the treatment applied by cach Customs administration to goods and means of transport subject to Customs control;
Agreement on Customs Valuation means the Agreement on Implementation of Article VII of GATT 1994, which forms part of the WTO Agreement; and
means of transport means the various types of vessels, vehicles and aircraft entering or leaving the customs territory transporting persons and/or goods.
Article 5.2. Scope and Objectives
1. This Chapter shall apply, in accordance with international obligations and the domestic laws and regulations of the Parties, to customs procedures applied to goods traded between the Parties and to the movement of means of transport between the Parties.
2. For the purposes of this Chapter, the Parties:
(a) promote the simplification and harmonization of their customs procedures;
(b) ensure the efficient and expeditious clearance of goods and the movement of means of transport;
(c) ensure predictability, consistency and transparency in the application of customs legislation, including the administrative procedures of the Parties;
(d) facilitate trade between them; and
(e) promote cooperation between their customs administrations.
Article 5.3. Facilitation
1. Each Party shall ensure that its customs procedures and practices are predictable, consistent, transparent and facilitate trade.
2. Each Party shall, where possible and to the extent permitted by its respective customs legislation, conform its customs procedures to the standards and recommended practices of the World Customs Organization (WCO) to which that Party is a contracting party, in particular those of the International Convention on the Simplification and Harmonization of Customs Procedures (as amended), known as the Revised Kyoto Convention.
3. The customs administrations of the Parties shall facilitate clearance, including release of goods, in the administration of their procedures.
4. Each Party shall provide a focal point, electronic or otherwise, through which its traders may submit the regulatory information required to obtain clearance, including the release of goods.
Article 5.4. Customs Valuation
The Parties shall determine the customs value of goods traded between them in accordance with the provisions of Article VII of GATT 1994 and the Agreement on Customs Valuation.
Article 5.5. Tariff Classification
The Parties shall apply the International Convention on the Harmonized Commodity Description and Coding System to goods traded between them.
Article 5.6. Customs Cooperation
1. The customs administrations of the Parties shall provide cooperation and mutual assistance to ensure the correct application of customs legislation, the review of customs procedures, the prevention, investigation and combating of customs offenses to achieve a satisfactory balance between effective control and facilitation.
2. The customs administrations of the Parties shall assist each other in connection with:
(a) the implementation and operation of this Chapter;
(b) the application of the Customs Valuation Agreement,
(c) simplify and harmonize customs procedures;
(d) develop and implement the best customs practices and customs management techniques. risks; (c) the exchange of information, best practices, experiences, training skills and any related support appropriate to strengthen customs management;
(f) establish or maintain channels of communication to strengthen the effective exchange of information and improve coordination in customs matters;
(g) improving the use of technologies that lead to better enforcement of laws and regulations and regulations governing imports, exports and transit; and
(h) other matters as mutually determined by the Parties.
3. The Parties'™customs administrations will promote cooperation based on "Smart Customs, Smart Borders and Smart Connectivity" in order to enhance mutual trust and promote trade facilitation to achieve high-level connectivity between the Parties.
4. The customs administrations of the Parties shall provide each other with cooperation and mutual assistance in customs matters in accordance with the provisions of this Chapter and shall consider the possibility of developing an agreement concerning cooperation and mutual administrative assistance covering relevant customs matters.
Article 5.7. Transparency
1. Each Party shall promptly publish, including on the Internet, its laws, regulations and, where appropriate, administrative rules or procedures of general application relevant to trade in goods between the Parties.
2. Each Party shall designate one or more enquiry points to handle inquiries from interested persons on customs matters and shall make available on the Internet information on the procedures for making such inquiries.
3. To the extent possible and consistent with its domestic laws and legal system, each Party shall publish, in advance on the Internet, draft laws and regulations of general application relevant to trade between the Parties, with a view to providing traders and other interested persons with an opportunity to comment.
4. To the extent possible and consistent with its domestic laws and legal system, each Party shall ensure that a reasonable interval is established between the publication and entry into force of new or amended laws and regulations of general application relevant to trade between the Parties.
Article 5.8. Advance Rulings
1. The customs administration of each Party shall issue an advance ruling, prior to the importation of a good into its customs territory, upon written request containing all necessary information, on the requirement of the exporter, importer or any person with a justifiable cause or a representative of them (1), with respect to:
(a) the origin of a good in accordance with Chapter 4 (Rules of Origin and Implementation Procedures);
(b) the tariff classification of a good; and (c) any other matter agreed upon by the Parties.
2. The customs administration of the importing Party shall issue an advance ruling within 90 days of receipt of all necessary information and compliance with the requirements.
3. Each Party shall provide that an advance ruling shall be valid as of the date on which it is issued, or such other date specified in the advance ruling, provided that the laws, regulations, administrative rulings, and the facts or circumstances on which the advance ruling is based, remain unchanged.
4. The customs administration of the importing Party may modify, revoke or invalidate an advance ruling:
(a) whether the advance ruling was based on a mistake of fact;
(b) if there is a change in the material facts or circumstances on which the advance ruling was based;
(c) if incorrect information was provided or relevant information was withheld; or
(d) to comply with a change in its domestic legislation, a judicial decision or an amendment to this Chapter.
Article 5.9. Review and Appeals
Each Party shall, in accordance with its laws and regulations, provide that the importer, exporter or any other person affected by such administrative determinations or decisions shall have access to:
(a) a level of administrative review of determinations by its customs administration, independent of the official or office responsible for the decision under review, and
(b) judicial review of administrative determinations subject to its laws and regulations.
Article 5.10. Application of Information Technology
1. The Parties' customs administrations shall use information technology to support customs operations, including the exchange of best practices among themselves in order to improve their customs procedures where economical and efficient, particularly in the context of paperless trade, taking into account WCO developments in this area.
2. Customs administrations of the Parties are encouraged to focus on the application of new technologies, including the development of hardware facilities and computer systems, to speed up customs operations and increase the accuracy and impartiality of customs control.
Article 5.11. Risk Management
1. The customs administration of each Party shall focus control measures on high- risk goods and facilitate the release of low-risk goods in the administration of customs procedures.
2. The customs administration of each Party shall design and implement risk management in a manner that avoids arbitrary or unjustifiable discrimination or disguised restrictions on international trade.
Article 5.12. Dispatch of Goods
1. Each Party shall adopt or maintain simplified customs procedures for the efficient clearance of goods in order to facilitate trade between the Parties. This paragraph shall not require a Party to release a good when its clearance requirements have not been met.
2. Pursuant to paragraph 1, each Party shall adopt or maintain procedures that:
(a) arrange for clearance of goods as soon as possible after arrival, provided that all other regulatory requirements have been met; and
(b) as appropriate, provide for advance electronic submission and processing of information prior to the physical arrival of the goods with a view to expediting the clearance of goods.
3. Each Party shall adopt or maintain procedures that permit the release of goods prior to the final assessment of duties, taxes, fees and charges, if such assessment is not made prior to, or upon arrival or as soon as practicable after arrival and provided that all other regulatory requirements have been met. As a condition of such clearance, a Party may require security, in accordance with its laws and regulations, not exceeding the amount the Party requires to secure payment of the customs duties, taxes, fees and charges ultimately due on the goods covered by the security.
4. Nothing in this Article shall affect the right of a Party to examine, detain, seize, confiscate or otherwise deal with goods in accordance with its laws and regulations.
5. With a view to preventing avoidable loss or deterioration of perishable goods, and provided that all regulatory requirements have been met, each Party shall provide for prompt clearance of perishable goods, and under normal circumstances within the time as possible.
6. For the purposes of this provision, perishable goods shall mean goods that deteriorate rapidly due to their natural characteristics, particularly in the absence of adequate storage conditions.
Article 5.13. Authorized Economic Operator
1. The customs administrations of the Parties shall establish the Authorized Economic Operator (AEO) program to promote informed compliance and efficiency of customs control and share best practices among the Parties.
2. The customs administrations of the Parties shall work towards mutual recognition of AEOs.
Article 5.14. Penalties
Each Party shall adopt or maintain measures to permit the imposition of administrative and, where appropriate, criminal penalties for violations of its customs laws and regulations, including those governing tariff classification, customs valuation, rules of origin and claims for preferential tariff treatment under this Agreement.
Article 5.15. Confidentiality
The customs administration of cach Party shall maintain the confidentiality of the information and protect it from use or disclosure that could prejudice the competitive position of the person providing the information.
Article 5.16. Consultations
1. The customs administration of each Party may at any time request consultations with the customs administration of the other Party on any matter arising from the operation or implementation of this Chapter, where there are reasonable grounds provided by the requesting Party. Such consultations shall be conducted through the relevant points of contact and shall take place within 30 days of the request, unless the customs administrations of both Parties determine mutually the opposite.
2. In the event that such consultations do not resolve the matter, the requesting Party may refer the matter to the Committee on Customs Procedures and Trade Facilitation established under Article 5.17 (Committee on Customs Procedures and Trade Facilitation) of this Chapter for consideration.
3. Each customs administration shall designate one or more contact points for the purposes of this Chapter and shall provide details of such contact points to the other Party. The customs administrations of the Parties shall promptly notify cach other of any changes in the details of their contact points.
Article 5.17. Committeeon Customs Procedures and Trade Facilitation
1. The Parties, with a view to the effective implementation and operation of this Chapter, establish a Customs Procedures and Trade Facilitation Committee (CPTF Committee), under the Free Trade Commission.
2. The CBAP Committee shall be composed of representatives of the customs administrations and, upon mutual agreement, the relevant governmental authorities of the Parties.
3. The functions of the PAFC Committee shall be as follows:
(a) to ensure the correct operation of this Chapter and to resolve all questions arising from its application;
(b) review the operation and implementation of this Chapter, as well as revise this Chapter as appropriate;
(c) identify areas related to this Chapter that should be improved to facilitate trade between the Parties;
(d) make recommendations and report to the Free Trade Commission; and
(c) address any matter raised by cach customs administration in accordance with Article 5.16 (Consultations) of this Chapter, without prejudice to the rights and obligations set forth in Chapter 13 (Dispute Settlement) of this Agreement.
4. The PAFC Committee shall meet at places and times agreed upon by the Parties.
Chapter 6. Trade Defense
Section I. Global, Antidumping and Countervailing Safeguards
Article 6.1. Global Safeguards Measures
1. The Parties maintain their rights and obligations under Article XIX of GATT 1994 and the Agreement on Safeguards as defined in Article 6.9 (Definitions).
2. Measures adopted pursuant to Article XIX of GATT 1994 and the Agreement on Safeguards as defined in Article 6.9 (Definitions) shall not be subject to Chapter 13 (Dispute Settlement) of this Agreement.
Article 6.2. Antidumping and Countervailing Duties
1. The Parties maintain their rights and obligations under the Agreement on Implementation of Article VI of GATT 1994 and the Agreement on Subsidies and Countervailing Measures, which are part of the WTO Agreement.
2. Anti-dumping measures taken pursuant to Article VI of GATT 1994 and the Agreement on Implementation of Article VI of GATT 1994 or countervailing measures taken pursuant to Article VI of GATT 1994 and the Agreement on Subsidies and Countervailing Measures shall not be subject to Chapter 13 (Dispute Settlement) of this Agreement.
3. Both Parties confirm that there will be no practice between the two Parties to use a methodology based on the substitute value of a third country, including the use of a substitute price or a substitute cost to determine the normal value and the export price when determining the dumping margin during an anti-dumping proceeding. (2)
Section II. Bilateral Safeguards
Article 6.3. Imposition of a Bilateral Safeguard Measure
1. If, as a result of the reduction or elimination of a customs duty provided for in this Agreement, a product benefiting from preferential tariff treatment under this Agreement is being imported into the territory 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 thereof to a domestic industry producing a like or directly competitive product, the importing Party may impose a safeguard measure described in paragraph 2 only during the transition period.
2. If the conditions set out in paragraph 1 are met, a Party may, to the extent necessary to prevent or remedy the serious injury, or threat thereof; and to facilitate adjustment:
(a) suspend the future reduction of any customs duties on the product provided for in this Agreement; or
(b) increase the customs duty on the product to a level not exceeding the lesser of:
(i) the MFN customs tariff applied at the time the measure is adopted; or
(ii) the MFN customs tariff applied on the day immediately preceding the date of entry into force of this Agreement. (3)
Article 6.4. Standards for Definitive Bilateral Safeguarding
1. A Party may apply a definitive bilateral safeguard measure for an initial period of three years, with an extension of no more than one year. Regardless of its duration, such measure shall terminate at the end of the transition period determined in Article 6. 9 (Definitions).
2. No safeguard measure shall be applied to the importation of a product that has previously been subject to such a measure, unless a period equivalent to half of the total duration of the measure applied has elapsed.
3. No Party may impose a safeguard measure on a product that is subject to a measure that the Party has imposed pursuant to Article XIX of the GATT 1994 and the Agreement on Safeguards, and no Party may continue maintaining a safeguard measure on a product that becomes subject to a measure that the Party imposes pursuant to Article XIX of the GATT 1994 and the Agreement on Safeguards.
4. Upon termination of a safeguard measure, the rate of duty shall be as set forth in the Party's Schedule to Annex 2 (Schedule of Tariff Commitments) to this Agreement, as if the measure had never been applied.
Article 6.5. Investigation Procedures and Transparency Requirements
1. The importing Party may adopt a safeguard measure under this Section only after an investigation by its competent authorities and in accordance with Article 3 and Article 4.2 of the Agreement on Safeguards, and to this end, Article 3 and Article 4.2 of the Agreement on Safeguards are incorporated into and made part of this Agreement, mutatis mutandis.
2. Each Party shall ensure that its competent investigating authorities complete any bilateral safeguard investigation within 12 months from the date of its initiation.
Article 6.6. Interim Measures
1. In critical circumstances where any delay would cause damage difficult to repair, a Party may adopt a provisional safeguard measure pursuant to a preliminary determination that there is clear evidence that increased imports have caused or are threatening to cause serious injury. The duration of the provisional measure shall not exceed 200 days. Such action shall take the form of a suspension of the future reduction of any customs duties provided for on the product in this Agreement or an increase in customs duties at a rate not to exceed the lesser of the rate provided for in paragraph 2(b) of Article 6.3 (Imposition of a Bilateral Safeguard Measure).
2. Any additional customs duties or guarantees collected shall be refunded promptly if the further investigation does not establish that the increased imports have caused or threatened to cause serious injury to a domestic industry. The duration of such provisional measure shall be counted as part of the initial period and any extension of a definitive measure.
Article 6.7. Notification and Consultation
1. A Party shall promptly notify the other Party, in writing, of the following:
(a) the initiation of an investigation;
(b) the adoption of a provisional safeguard measure;
(c) having found serious injury or threat of serious injury caused by increased imports;
(d) having decided to impose or extend a definitive measure; and
(e) having decided to modify a previously adopted measure.
2. In making the notifications referred to in subparagraphs (d) and (c) of paragraph 1, the Party applying the measure shall provide the other Party with all relevant information, such as an accurate description of the product involved, the proposed measure, the reasons for introducing such measure, the proposed date of introduction and its expected duration. The notifying Party shall provide an unofficial courtesy translation into English of the notification.