(b) For the purposes of this paragraph, "pallet" means a device on the deck of which a quantity of goods can be assembled to form a unit load for the purpose of transporting it, or of handling or stacking it with the assistance of mechanical appliances. This device is made up of two decks separated by bearers, or of a single deck supported by feet; its overall height is reduced to the minimum compatible with handling by fork lift trucks or pallet trucks; it may or may not have a superstructure.
2. Subject to Chapter 8 (Trade in Services) and Chapter 10 (Investment), in respect of containers granted temporary admission pursuant to paragraph 1: (7)
(a) each Party shall allow a container used in international traffic that enters its territory from the territory of another Party to exit its territory on any route that is reasonably related to the economic and prompt departure of such container; (8)
(b) no Party shall require any security or impose any penalty or charge solely by reason of any difference between the port of entry and the port of departure of a container;
(c) no Party shall condition the release of any security that it imposes in respect of the entry of a container into its territory on the containerâs exit through any particular port of departure; and
(d) no Party shall require that the carrier bringing a container from the territory of another Party into its territory be the same carrier that takes the container to the territory of another Party.
Article 2.12. Duty-free Entry of Samples of No Commercial Value
Each Party shall grant duty-free entry to samples of no commercial value, imported from the territory of another Party, subject to its laws and regulations, regardless of their origin.
Article 2.13. Agricultural Export Subsidies
1. The Parties reaffirm their commitments made in the Ministerial Decision of 19 December 2015 on Export Competition (WT/MIN(15)/45, WT/L/980), adopted in Nairobi on 19 December 2015, including elimination of scheduled export subsidy entitlements for agricultural goods.
2. The Parties share the objective of the multilateral elimination of export subsidies for agricultural goods and shall work together to prevent their reintroduction in any form.
Article 2.14. Transposition of Schedules of Tariff Commitments
Each Party shall ensure that the transposition of its Schedule in Annex I (Schedules of Tariff Commitments), undertaken in order to implement Annex I (Schedules of Tariff Commitments) in the nomenclature of the revised HS following periodic amendments to the HS, is carried out without impairing the tariff commitments set out in Annex I (Schedules of Tariff Commitments).
Article 2.15. Modification of Concessions
In exceptional circumstances, where a Party faces unforeseen difficulties in implementing its tariff commitments, that Party may, with the agreement of all other interested Parties, and with the decision of the RCEP Joint Committee, modify or withdraw a concession contained in its Schedule in Annex I (Schedules of Tariff Commitments). In order to seek to reach such agreement, the Party proposing to modify or withdraw its concession shall inform the RCEP Joint Committee and engage in negotiations with any interested Parties. In such negotiations, the Party proposing to modify or withdraw its concession shall maintain a level of reciprocal and mutually advantageous concessions no less favourable to the trade of all other interested Parties than that provided for in this Agreement prior to such negotiations, which may include compensatory adjustments with respect to other goods. The mutually agreed outcome of the negotiations, including any compensatory adjustments, shall be reflected in Annex I (Schedules of Tariff Commitments) in accordance with Article 20.4 (Amendments).
Section B. Non-tariff Measures
Article 2.16. Application of Non-tariff Measures
1. A Party shall not adopt or maintain any non-tariff measure on the importation of any good of another Party or on the exportation of any good destined for the territory of another Party, except in accordance with its rights and obligations under the WTO Agreement or this Agreement.
2. Each Party shall ensure the transparency of its non-tariff measures permitted under paragraph 1 and shall ensure that any such measures are not prepared, adopted, or applied with the view to or with the effect of creating unnecessary obstacles to trade among the Parties.
Article 2.17. General Elimination of Quantitative Restrictions
1. Except as otherwise provided in this Agreement, no Party shall adopt or maintain any prohibition or restriction other than duties, taxes, or other charges, whether made effective through quotas, import or export licences, or other measures, on the importation of any good of another Party or on the exportation of any good destined for the territory of another Party, except in accordance with its rights and obligations under the relevant provisions of the WTO Agreement. To this end, Article XI of GATT 1994 is incorporated into and made part of this Agreement, mutatis mutandis.
2. Where a Party adopts an export prohibition or restriction in accordance with subparagraph 2(a) of Article XI of GATT 1994, that Party shall, upon request:
(a) inform another Party or Parties of such prohibition or restriction and its reasons together with its nature and expected duration, or publish such prohibition or restriction; and
(b) provide another Party or Parties that may be seriously affected with a reasonable opportunity for consultation with respect to matters related to such prohibition or restriction.
Article 2.18. Technical Consultations on Non-tariff Measures
1. A Party may request technical consultations with another Party on a measure it considers to be adversely affecting its trade. The request shall be in writing and shall clearly identify the measure and the concerns as to how the measure adversely affects trade between the Party requesting technical consultations (hereinafter referred to as "the requesting Party" in this Article) and the Party to which a request has been made (hereinafter referred to as "the requested Party" in this Article).
2. Where the measure is covered by another Chapter, any consultation mechanism provided in that Chapter shall be used, unless otherwise agreed between the requesting Party and the requested Party (hereinafter collectively referred to as "the consulting Parties" in this Article).
3. Except as provided in paragraph 2, the requested Party shall respond to the requesting Party and enter into technical consultations within 60 days of the receipt of the written request referred to in paragraph 1, unless otherwise determined by the consulting Parties, with a view to reaching a mutually satisfactory solution within 180 days of the request. Technical consultations may be conducted via any means mutually agreed by the consulting Parties.
4. Except as provided in paragraph 2, the request for technical consultations shall be circulated to all the other Parties. Other Parties may request to join the technical consultations on the basis of interests set out in their requests. The participation of any other Party is subject to the consent of the consulting Parties. The consulting Parties shall give full consideration to such requests.
5. If the requesting Party considers that a matter is urgent or involves perishable goods, it may request that technical consultations take place within a shorter time frame than that provided for under paragraph 3.
6. Except as provided in paragraph 2, each Party shall submit an annual notification to the Committee on Goods regarding any use of technical consultations under this Article, whether as the requesting Party or the requested Party. This notification shall contain a summary of the progress and outcomes of the consultations.
7. For greater certainty, technical consultations under this Article shall be without prejudice to a Party's rights and obligations pertaining to dispute settlement proceedings under Chapter 19 (Dispute Settlement) and the WTO Agreement.
Article 2.19. Import Licensing Procedures
1. Each Party shall ensure that all automatic and non-automatic import licensing procedures are implemented in a transparent and predictable manner, and applied in accordance with the Import Licensing Agreement. No Party shall adopt or maintain a measure that is inconsistent with the Import Licensing Agreement.
2. Each Party shall, promptly after the date of entry into force of this Agreement for that Party, notify the other Parties of its existing import licensing procedures. The notification shall include the information specified in paragraph 2 of Article 5 of the Import Licensing Agreement. A Party shall be deemed to be in compliance with this paragraph if:
(a) it has notified the procedures to the WTO Committee on Import Licensing provided for in Article 4 of the Import Licensing Agreement (hereinafter referred to as "WTO Committee on Import Licensing" in this Chapter), together with the information specified in paragraph 2 of Article 5 of the Import Licensing Agreement; and
(b) in the most recent annual submission due before the date of entry into force of this Agreement for that Party to the WTO Committee on Import Licensing in response to the annual questionnaire on import licensing procedures described in paragraph 3 of Article 7 of the Import Licensing Agreement, it has provided, with respect to those existing import licensing procedures, the information requested in that questionnaire.
3. Each Party shall notify the other Parties of any new import licensing procedure and any modification it makes to its existing import licensing procedures, to the extent possible 30 days before the new procedure or modification takes effect. In no case shall a Party provide the notification later than 60 days after the date of its publication. A notification provided under this paragraph shall include the information specified in Article 5 of the Import Licensing Agreement. A Party shall be deemed to be in compliance with this paragraph if it notifies a new import licensing procedure or a modification to an existing import licensing procedure to the WTO Committee on Import Licensing in accordance with paragraph 1, 2, or 3 of Article 5 of the Import Licensing Agreement.
4. Before applying any new or modified import licensing procedure, a Party shall publish the new procedure or modification on an official government website. To the extent possible, the Party shall do so at least 21 days before the new procedure or modification takes effect.
5. The notification required under paragraphs 2 and 3 is without prejudice to whether the import licensing procedure is consistent with this Agreement.
6. A notification made under paragraph 3 shall state if, under any procedure that is a subject of the notification:
(a) the terms of an import licence for any product limit the permissible end users of the product; or
(b) the Party imposes any of the following conditions on eligibility for obtaining a licence to import any product:
(i) membership in an industry association;
(ii) approval by an industry association of the request for an import licence;
(iii) a history of importing the product, or similar products;
(iv) minimum importer or end user production capacity; (v) minimum importer or end user registered capital; or
(vi) a contractual or other relationship between the importer and distributor in the Party's territory.
7. Each Party shall, to the extent possible, answer within 60 days all reasonable enquiries from another Party regarding the criteria employed by its respective licensing authorities in granting or denying import licences. The importing Party shall publish sufficient information for the other Parties and traders to know the basis for granting or allocating import licences.
8. No application for an import licence shall be refused for minor documentation errors that do not alter the basic data contained therein. Minor documentation errors may include formatting errors, such as the width of a margin or the font used, and spelling errors which are obviously made without fraudulent intent or gross negligence.
9. If a Party denies an import licence application with respect to a good of another Party, it shall, on request of the applicant and within a reasonable period after receiving the request, provide the applicant with an explanation of the reason for the denial.
Article 2.20. Fees and Formalities Connected with Importation and Exportation
1. Each Party shall ensure, in accordance with paragraph 1 of Article Vill of GATT 1994, that all fees and charges of whatever character (other than import or export duties, charges equivalent to an internal tax or other internal charge applied consistently with paragraph 2 of Article Ill of GATT 1994, and anti-dumping and countervailing duties) imposed on or in connection with importation or exportation are limited in amount to the approximate cost of services rendered and do not represent an indirect protection to domestic goods or a taxation of imports or exports for fiscal purposes.
2. Each Party shall promptly publish details of the fees and charges that it imposes in connection with importation or exportation and shall make such information available on the internet.
3. No Party shall require consular transactions, including related fees and charges, in connection with the importation of a good of another Party. No Party shall require that any customs documentation supplied in connection with the importation of any good of another Party be endorsed, certified, or otherwise sighted or approved by the importing Party's overseas representatives, or entities with authority to act on the importing Party's behalf, nor impose any related fees or charges.
Article 2.21. Sectoral Initiatives
1. The Parties may decide to initiate a work programme on sector-specific issues. Should the Parties decide to initiate such a work programme, it shall be established and overseen by the Committee on Goods. The Parties shall endeavour to finalise such a work programme no later than two years after the initiation of the work programme.
2. The Parties shall agree on the sectors to be included in such a work programme, taking into consideration the interests of all the Parties, including those sectors proposed by Parties during the course of the negotiation of this Agreement or other sectors as may be identified by a Party.
3. Any work programme initiated under this Article should be conducted to:
(a) enhance the Parties' understanding of the issue;
(b) facilitate input from business and other relevant stakeholders; and
(c) explore the possible actions by the Parties that would facilitate trade.
4. Based on the outcome of any work programme initiated under this Article, the Committee on Goods may make recommendations to the RCEP Joint Committee.
Chapter 3. Rules of Origin
Section A. Rules of Origin
Article 3.1. Definitions
For the purposes of this Chapter:
(a) aquaculture means the farming of aquatic organisms including fish, molluscs, crustaceans, other aquatic invertebrates, and aquatic plants from seed stock such as eggs, fry, fingerlings, and larvae, by intervention in the rearing or growth processes to enhance production such as regular stocking, feeding, or protection from predators;
(b) CIF value means the value of the imported good, inclusive of the cost of insurance and freight up to the port or place of entry into the country of importation;
(c) competent authority means the government authority or authorities designated by a Party and notified to the other Parties;
(d) customs authority means a customs authority as defined in subparagraph (a) of Article 4.1 (Definitions);
(e) FOB value means the value of the good free on board, inclusive of the cost of transport (regardless of the mode of transport) to the port or site of final shipment abroad;
(f) fungible goods or materials means goods or materials that are interchangeable for commercial purposes, whose properties are essentially identical;
(g) Generally Accepted Accounting Principles means those principles recognised by consensus or with substantial authoritative support in a Party, with respect to the recording of revenues, expenses, costs, assets, and liabilities; the disclosure of information; and the preparation of financial statements. These principles may encompass broad guidelines of general application as well as detailed standards, practices, and procedures;
(h) good means any merchandise, product, article, or material;
(i) issuing body means an entity designated or authorised by a Party to issue a Certificate of Origin and notified to the other Parties in accordance with this Chapter;
(j) material means a good that is used in the production of another good;
(k) non-originating good or non-originating material means a good or material which does not qualify as originating in accordance with this Chapter;
(l) originating good or originating material means a good or material which qualifies as originating in accordance with this Chapter;
(m) producer means a person who engages in the production of goods; and
(n) production means methods of obtaining goods including growing, mining, harvesting, farming, raising, breeding, extracting, gathering, collecting, capturing, fishing, aquaculture, trapping, hunting, manufacturing, producing, processing, or assembling.
Article 3.2. Originating Goods
For the purposes of this Agreement, a good shall be treated as an originating good if it is:
(a) wholly obtained or produced in a Party as provided in Article 3.3 (Goods Wholly Obtained or Produced);
(b) produced in a Party exclusively from originating materials from one or more of the Parties; or
(c) produced in a Party using non-originating materials, provided the good satisfies the applicable requirements set out in Annex 3A (Product-Specific Rules), and meets all other applicable requirements of this Chapter.
Article 3.3. Goods Wholly Obtained or Produced
For the purposes of Article 3.2 (Originating Goods), the following goods shall be considered as wholly obtained or produced in a Party:
(a) plants and plant goods, including fruit, flowers, vegetables, trees, seaweed, fungi, and live plants, grown and harvested, picked, or gathered there;
(b) live animals born and raised there; (c) goods obtained from live animals raised there;
(d) goods obtained by hunting, trapping, fishing, farming, aquaculture, gathering, or capturing conducted there;
(e) minerals and other naturally occurring substances, not included in subparagraphs (a) through (d), extracted or taken from its soil, waters, seabed, or subsoil beneath the seabed;
(f) goods of sea-fishing and other marine life taken by vessels of that Party (1), and other goods taken by that Party or a person of that Party, from the waters, seabed, or subsoil beneath the seabed outside the territorial sea of the Parties and non-Parties, in accordance with international law, provided that, in case of goods of sea-fishing and other marine life taken from the exclusive economic Zone of any Party or non-Party, that Party or person of that Party has the rights to exploit (2) such exclusive economic zone, and in case of other goods, that Party or person of that Party has rights to exploit such seabed and subsoil beneath the seabed, in accordance with international law;
(g) goods of sea-fishing and other marine life taken by vessels of that Party from the high seas in accordance with international law;
(h) goods processed or made on board any factory ships of that Party, exclusively from the goods referred to in subparagraph (f) or (g);
(i) goods which are:
(i) waste and scrap derived from production or consumption there, provided that such goods are fit only for disposal, for the recovery of raw materials, or for recycling purposes; or
(ii) used goods collected there, provided that such goods are fit only for disposal, for the recovery of raw materials, or for recycling purposes; and
(j) goods obtained or produced there solely from goods referred to in subparagraphs (a) through (i), or from their derivatives.
Article 3.4. Cumulation
1. Unless otherwise provided in this Agreement, goods and materials which comply with the origin requirements provided in Article 3.2 (Originating Goods), and which are used in another Party as materials in the production of another good or material, shall be considered as originating in the Party where working or processing of the finished good or material has taken place.
2. The Parties shall commence a review of this Article on the date of entry into force of this Agreement for all signatory States. This review will consider the extension of the application of accumulation in paragraph 1 to all production undertaken and value added to a good within the Parties. The Parties shall conclude the review within five years of the date of its commencement, unless the Parties agree otherwise.
Article 3.5. Calculation of Regional Value Content
1. The regional value content of a good, specified in Annex 3A (Product-Specific Rules), shall be calculated by using either of the following formulas:
(a) Indirect/Build-Down Formula
RVC = FOB - VNM x 100
FOB
or
(b) Direct/Build-Up Formula
RVC = VOM + Direct Labour Cost + Direct Overhead Cost + Profit + Other Cost x 100
FOB
where:
RVC is the regional value content of a good, expressed as a percentage;
FOB is the FOB value as defined in subparagraph (e) of Article 3.1 (Definitions);
VOM is the value of originating materials, parts, or produce acquired or self-produced, and used in the production of the good;
VNM is the value of non-originating materials used in the production of the good;
Direct Labour Cost includes wages, remuneration, and other employee benefits; and
Direct Overhead Cost is the total overhead expense.
2. The value of goods under this Chapter shall be calculated, mutatis mutandis, in accordance with Article VII of GATT 1994 and the Customs Valuation Agreement. All costs shall be recorded and maintained in accordance with the Generally Accepted Accounting Principles applicable in the Party where the goods are produced.
3. The value of non-originating materials shall be:
(a) forimported materials, the CIF value of the materials at the time of importation; and
(b) for materials obtained within a Party, the earliest ascertainable price paid or payable.
4. A material of undetermined origin shall be treated as a non- originating material.
5. The following expenses may be deducted from the value of non- originating materials or materials of undetermined origin:
(a) the costs of freight, insurance, packing, and other transport-related costs incurred in transporting the goods to the producer;
(b) duties, taxes, and customs brokerage fees, other than duties that are waived, refunded, or otherwise recovered; and
(c) costs of waste and spillage, less the value of any renewable scrap or by-products.
Where the expenses listed in subparagraphs (a) through (c) are unknown or evidence is not available, then no deduction is allowed for those expenses.
Article 3.6. Minimal Operations and Processes
Notwithstanding any provisions of this Chapter, the following operations when undertaken on non-originating materials to produce a good shall be considered as insufficient working or processing to confer on that good the status of an originating good:
(a) preserving operations to ensure that the good remains in good condition for the purposes of transport or storage;
(b) packaging or presenting goods for transportation or sale;
(c) simple (3) processes, consisting of sifting, screening, sorting, classifying, sharpening, cutting, slitting, grinding, bending, coiling, or uncoiling;
(d) affixing or printing of marks, labels, logos, or other like distinguishing signs on goods or their packaging;
(e) mere dilution with water or another substance that does not materially alter the characteristics of the good;
(f) disassembly of products into parts;
(g) slaughtering (4) of animals;
(h) simple painting and polishing operations;
(i) simple peeling, stoning, or shelling;
(j) simple mixing of goods, whether or not of different kinds; or
(k) any combination of two or more operations referred to in subparagraphs (a) through (j).