(a) (a) simple (10) combining operations, labelling, pressing, cleaning or dry cleaning or packaging operations, or any combination thereof;
(b) (b) cutting to length or width and hemming, stitching or overlocking fabrics which are readily identifiable as being intended for a particular commercial use;
(c) (c) trimming and/or joining together by sewing, looping, linking, attaching of accessory articles such as straps, bands, beads, cords, rings and eyelets;
(d) (d) one or more finishing operations on yarns, fabrics or other textile articles, such as bleaching, waterproofing, decanting, shrinking, mercerizing, or similar operations; or
(e) dyeing or printing of fabrics or yarns.
Article 3.8. Direct Consignment
An originating good shall be deemed as directly consigned from the territory of the exporting Party to the territory of the importing Party:
(a) if the goods are transported without passing through the territory of any non-Party; or
(b) if the goods are transported through the territory of any non-Party provided that:
(i) the transit entry is justified for geographical reasons or transport requirements;
(ii) the goods have not entered into trade or consumption in the territory of such non-Party;
(iii) the goods have not undergone any operation in the territory of such non-Party other than unloading and reloading or any operation required to keep the goods in good condition; and
(iv) the goods have remained under the control of the customs authority of such non-Party.
Article 3.9. Treatment of Packing Materials and Containers
1. If a good is subject to the change in tariff classification criterion as provided in paragraph 1(b)(i) of Article 3.4 (Not Wholly Obtained or Produced Goods), packing materials and containers classified together with the packaged good, shall not be taken into account in determining origin.
2. If a good is subject to qualifying value content requirement as provided in paragraph 1(b)(ii) of Article 3.4 (Not Wholly Obtained or Produced Goods), the value of the packing materials and containers, shall be taken into account in determining the origin of that good, provided that the packing materials and containers are considered as forming a whole with the good and the good is packaged in such packaging materials and containers for the purposes of retail sale. Packing materials and containers in which a good is packed for the purposes of shipment and used exclusively for the transportation of a good shall not be taken into account in determining the origin of such good.
Article 3.10. Accessories, Spare Parts, Tools and Instructional or other Information Material
1. Any accessories, spare parts, tools, instructional or other information material delivered with a good that form part of the standard accessories, spare parts, tools or instructional or other information material of the good, shall be treated as originating goods if the good is an originating good, and shall not be taken into account 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, tools or the instructional and other information material are not invoiced separately from the good; and
(b) the quantities and value of the accessories, spare parts, tools or the instructional and other information material are standard trade practice for the good in the domestic market of the exporting Party.
2. If the good is subject to a qualifying value content requirement, the value of the accessories, spare parts, tools or the instructional and other information material shall be taken into account as originating or non-originating materials, as the case may be, in calculating the qualifying value content of the good.
Article 3.11. Indirect Materials
In order to determine whether a good originates in the territory of a Party, any indirect material, including power, fuel, plant and equipment, machines, tools or consumables used to obtain such good shall be treated as originating irrespective of the origin of the material and its value shall be the cost registered in the accounting records of the producer of such good.
Article 3.12. Identical and Interchangeable Materials
For the purposes of establishing if a good is originating when it is manufactured utilising both originating and non-originating materials, mixed or physically combined, the origin of such materials can be determined on the basis of generally accepted accounting principles of stock control applicable or in accordance with the methods of inventory management practised in the exporting Party.
Explanation: For the purposes of this Article, "generally accepted accounting principles" means recognised consensus or substantial authoritative support given in the territory of a Party with respect to the recording of revenues, expenses, costs, assets, and liabilities, the disclosure of information, and the preparation of financial statements and may encompass broad guidelines for general application, as well as detailed standards, practices, and procedures.
Article 3.13. Certificate of Origin
A claim that an imported good shall be accepted as eligible for preferential tariff treatment shall be supported by a Certificate of Origin issued by an authority or authorities designated by the Government of the exporting Party and notified to the other Party in accordance with Annex 3-3 (Operational Certification Procedures).
Article 3.14. Implementation
The Sub-Committee on Trade in Goods established under Article 15.2 (Sub- Committees) shall consider matters relating to the implementation of this Chapter.
Chapter 4. CUSTOMS COOPERATION
Article 4.1. Objectives
1. The objectives of this Chapter are to:
(a) simplify and harmonize customs procedures of the Parties on the basis of international standards and best practices to which the Parties have agreed;
(b) ensure consistency, predictability and transparency in the application of customs laws and regulations of the Parties;
(c) ensure efficient and expeditious clearance of goods;
(d) facilitate trade in goods between the Parties;
(e) promote cooperation between the customs authorities; and
(f) exchange information relating to all customs matters to the extent possible.
2. All measures to facilitate trade shall be without prejudice to the fulfillment of legitimate statutory and policy objectives, including revenue and the protection of national security, health and the environment.
Article 4.2. Definitions
For the purposes of this Chapter:
(a) customs authority means the authority that according to the legislation of each Party is responsible for the administration and enforcement of its customs laws:
(i) in the case of Malaysia, the Royal Malaysian Customs Department; and
(ii) in the case of India, the Central Board of Excise & Customs;
(b) customs laws means such laws and regulations administered and enforced by the customs authority of each Party concerning the importation, exportation, and transit of goods, relating to customs duties, charges, and other taxes, or to prohibitions, restrictions, and other similar controls with respect to the movement of controlled items across the boundary of the customs territory of each Party;
(c) clearance means the accomplishment of the customs formalities necessary to allow goods to enter home use, to be exported or to be placed under another customs procedure;
(d) information means any data, documents, reports and certified or authenticated copies thereof or other communications which are maintained by the customs authority of a Party in the course of administering its customs laws; and
(e) persons means both natural and legal persons.
Article 4.3. Scope and Coverage
1. This Chapter shall apply to customs procedures required for the clearance of goods traded between the Parties.
2. This Chapter shall be implemented by each Party in accordance with the laws, regulations, national policies and administrative measures in force of each Party and within the competence and available resources of the customs authority of each Party.
Article 4.4. Publication and Enquiry Points
For the purposes of this Chapter, each party shall:
(a) make available on the internet or in print form all statutory and regulatory provisions and general administrative procedures applicable or enforced by its customs authority; and
(b) designate or maintain one or more inquiry points to address inquiries by interested persons concerning customs matters and shall make available on the Internet information concerning the procedures for making such inquiries.
Article 4.5. Clearance of Goods
1. Each Party shall, to the extent possible, adopt or maintain simplified customs procedures for the efficient clearance of goods in order to facilitate trade between the Parties.
2. For prompt clearance of goods traded between the Parties, to the extent possible, the Parties shall:
(a) provide for the clearance of goods within a period no more than that required to ensure compliance with its customs laws;
(b) provide for advance electronic submission and processing of information before physical arrival of goods to facilitate the expeditious clearance of goods on arrival;
(c) allow traders to interact with the customs authority without the mandatory use of brokers or customs agents; and
(d) harmonize its customs procedures, with relevant international standards and best practices, such as those recommended by the World Customs Organization.
Article 4.6. Information and Communications Technology
The customs authorities of the Parties shall cooperate to promote the use of information and communications technology including sharing best practices, for the purpose of improving their customs procedures.
Article 4.7. Risk Management
1. In order to facilitate clearance of goods traded between the Parties, the customs authority of each Party shall use risk management methodology.
2. The customs authority of each Party shall exchange information regarding best practices on risk management techniques.
Article 4.8. Cooperation and Capacity Building
1. Each Party shall cooperate and exchange information with each other on customs matters.
2. Bilateral cooperation shall include capacity building, such as training, technical assistance, exchange of experts and any other forms of cooperation, as may be mutually agreed upon by the Parties, for trade facilitation and effective administration of customs laws.
3. The Parties, shall in accordance with their national legal and administrative provisions in force, adopt procedures to enable a right holder, who has valid reason for suspecting that the importation of goods infringing an intellectual property may take place, to lodge an application in writing with competent authorities, for the suspension by customs authorities of the clearance of such goods.
4. To the extent permitted by their national laws and regulations, the customs authority of each Party shall assist each other in relation to:
(a) the implementation and operation of the provisions of this Agreement governing importation or exportation, including claims for preferential tariff treatment and the procedures for making claims for preferential tariff treatment;
(b) the implementation and operation of the WTO Agreement on Implementation of Article VIl of GATT 1994;
(c) enforcement of prohibitions and restrictions on exports to and imports from their respective territories;
(d) joint efforts to combat customs fraud; and
(e) promote cooperation in any other areas as may be mutually agreed upon by the Parties.
Article 4.9. Mutual Assistance
1. The customs authority of each Party shall, to the extent possible, provide the customs authority of the other Party, upon request or on its own initiative, with information which helps to ensure proper application of customs laws and the prevention of violation or attempted violation of customs laws.
2. To the extent permitted by their laws, regulations and national policies the customs authorities may provide each other with mutual assistance in order to prevent or investigate violations of customs law.
3. The request pursuant to paragraph 1 shall, wherever appropriate, specify:
(a) the verification procedures that the requesting authority has undertaken or attempted to undertake; and
(b) the specific information that the requesting authority requires, which may include:
(i) subject and reason for the request;
(ii) a brief description of the matter and the action requested; and
(iii) the names and addresses of the parties concerned with the proceedings, if known.
Article 4.10. Information Relating to Import and Export
Subject to each Party's laws, regulations and national policies, the requested authority shall, on request by the requesting authority, provide the requesting authority with information relating to:
(a) whether goods imported into the territory of the requesting authority have been lawfully exported from the territory of the requested authority; and
(b) whether goods exported from the territory of the requesting authority have been lawfully imported into the territory of the requested authority and whether the goods have been placed under any customs procedures.
Article 4.11. Review and Appeal
1. Subject to domestic laws and regulations in each Party, any affected person shall have the right to appeal against the decisions taken by the customs authority of the Party.
2. Each Party shall provide easily accessible process for administrative and judicial review or appeal of decision taken by its customs authority.
Article 4.12. Advance Rulings
In accordance with its domestic laws and regulations, each Party shall endeavour to provide, through its customs or other competent authority, for the expeditious issuance of written advance rulings, prior to the importation of goods into its territory, in the territory of the other Party.
Article 4.13. Temporary Admission
1. For the purposes of this Article, temporary ad mission means customs procedures under which certain goods may be brought into a customs territory conditionally, relieved totally or partially from the payment of customs duties. Such goods shall be imported for a specific purpose, and shall be intended for re-exportation within a specified period and without having undergone any charge except normal depreciation due to the use made of them.
2. Each Party shall facilitate the procedures for the temporary admission of goods traded between the countries in accordance with the Customs Convention on the A.T.A. Carnet for the Temporary Admission of Goods, as may be amended ("the A.T.A. Convention").
3. Each Party shall facilitate customs clearance of good in transit from or to the territory of the other Party in accordance with paragraph 3 of Article V of the GATT 1994.
4. The Parties shall endeavour to promote, through seminars and courses, the use of A.T.A. Carnet pursuant to the A.T.A. Convention for the temporary admission of goods and the facilitation of customs clearance of goods in transit in the territories of the Parties or non-Parties.
Article 4.14. Customs Contact Points
All communications under this Chapter shall be between the official contact points designated by each customs authority.
Article 4.15. Implementation
The Sub-Committee on Customs Cooperation established under Article 15.2 (Sub-Committees) shall consider matters relating to the implementation of this Chapter.
Chapter 5. TRADE REMEDIES
Section A. Bilateral Safeguards
Article 5.1. Definitions
For the purposes of this Section:
(a) domestic industry means, with respect to an imported product, the producers as a whole of the like or directly competitive product or those producers whose collective production of the like or directly competitive product constitutes a major proportion of the total domestic production of such product;
(b) provisional measure means a provisional bilateral safeguard measure described in Article 5.5 (Provisional Measures);
(c) serious injury means a significant overall impairment in the position of a domestic industry; and
(d) threat of serious injury means serious injury that is clearly imminent and shall be determined on the basis of facts and not merely on allegation, conjecture or remote possibility.
Article 5.2. Application of Bilateral Safeguard Measures
During the transition period, if as a result of the reduction or elimination of a customs duty pursuant to this Agreement, an originating product of a Party is being imported into the other Party's territory in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to a domestic industry producing like or directly competitive products, the other Party may, to the extent necessary to prevent or remedy serious injury and facilitate adjustment, apply a safeguard measure consisting of:
(a) the suspension of the further reduction of any rate of customs duty provided for under this Agreement on the originating product from the date on which the action to apply the safeguard measure is taken; or
(b) an increase of the rate of customs duty on the originating product to a level not to exceed the lesser of:
(i) the most-favoured-nation applied rate of customs duty in effect on the date on which the action to apply the safeguard measure is taken; or
(ii) the most-favoured-nation applied rate of customs duty in effect on the day immediately preceding the date of the start of the period of investigation.
Article 5.3. Scope and Duration of Bilateral Safeguard Measures
1. A Party shall apply a bilateral safeguard measure for such period of time as may be necessary to prevent or remedy serious injury and to facilitate adjustment. A Party may apply a bilateral safeguard measure for an initial period of no longer than two years. The period of a safeguard measure may be extended by up to two years provided that the conditions of this Chapter are met and that the bilateral safeguard measure continues to be applied to the extent necessary to prevent or remedy serious injury and that there is evidence that the industry is adjusting. The total period of a bilateral safeguard measure, including any extensions thereof, shall not exceed four years.
2. Regardless of its duration or whether it has been subject to extension, a safeguard measure on a product shall terminate at the end of the transition period for such product.
3. In order to facilitate adjustment in a situation where the proposed duration of a safeguard measure is over one year, the Party applying the safeguard measure shall progressively liberalise it at regular intervals during the application of the safeguard measure, including at the time of any extension.
4. No bilateral safeguard measure shall be applied to the import of a product that has previously been subject to such a measure, for a period of at least one year since the expiry of the measure.
5. In case a Party has to apply a safeguard or provisional measure again on the same originating product, the duration of the bilateral safeguard measure shall be less than the duration of the previous safeguard measure.
6. An investigation shall be promptly terminated without any bilateral safeguard measure being applied if imports of the originating product represent less than three per cent of total imports.
7. A Party shall not apply a bilateral safeguard or provisional measure on an originating product that is subject to a measure that the Party has applied pursuant to Article XIX of GATT 1994 and the WTO Agreement on Safeguards, or the WTO Agreement on Agriculture.
8. When a Party intends to apply, pursuant to Article XIX of GATT 1994 and the WTO Agreement on Safeguards, or the WTO Agreement on Agriculture, a measure on a product to which a bilateral safeguard measure is being applied, it shall terminate the bilateral safeguard measure prior to the imposition of the action to be applied pursuant to Article XIX of GATT 1994 and the WTO Agreement on Safeguards, or the WTO Agreement on Agriculture.
9. On the termination of a bilateral safeguard measure, the Party that applied the measure shall apply the rate of customs duty in effect as set out in its Schedule of Tariff Commitments as specified in Annex 2-1 on the date of termination as if the safeguard measure had never been applied.
10. No bilateral safeguard measure shall be taken beyond the expiration of the transition period that shall be defined as a period from the date of entry into force of this Agreement until seven years from the date of completion of tariff elimination or completion of tariff reduction, as the case may be for each good.
Article 5.4. Investigation
1. A Party may apply or extend a bilateral safeguard measure only following an investigation by the Party's competent authorities in accordance with the same procedures as those provided for in Articles 3 and 4.2 of the WTO Agreement on Safeguards.
2. The investigation shall include reasonable public notice to all interested parties and public hearings or other appropriate means in which importers, exporters and other interested parties could present evidence and their views, including the opportunity to respond to the presentations of other parties and to submit their views, inter alia, as to whether or not the application of a bilateral safeguard measure would be in the public interest.
3. An investigation shall be completed within one year from the date of initiation. Upon completion of an investigation, the competent authorities shall promptly publish a report setting forth their findings and reasoned conclusions reached on all pertinent issues of fact and law.
4. Each Party shall ensure the consistent, transparent, impartial and reasonable administration of its laws, regulations, decisions and rulings relating to all bilateral safeguard investigation proceedings.
Article 5.5. Provisional Measures
1. In critical circumstances where delay would cause damage which would be difficult to repair, a Party may apply a provisional measure, which shall take the form of the measure set out in paragraphs (a) or (b) of Article 5.2 (Application of Bilateral Safeguard Measures), pursuant to a preliminary determination that there is clear evidence that increased imports of an originating product of the other Party as a result of the reduction or elimination of a duty pursuant to this Agreement have caused or are threatening to cause serious injury.
2. The duration of such a provisional measure shall not exceed two hundred days during which period the pertinent requirements of Articles 5.1 (Definitions) to 5.4 (Investigation) shall be met. The duration of any such provisional measure shall be counted as part of the total period referred to in Article 5.3 (Scope and Duration of Bilateral Safeguard Measures).
3. Any additional customs duties collected as a result of such a provisional measure shall be promptly refunded if the subsequent investigation referred to in Article 5.4 (Investigation) does not determine that increased imports of an originating product of the other Party have caused or threatened to cause serious injury to a domestic industry. In such a case, the Party that applied the provisional measure shall apply the rate of customs duty set out in its Schedule of Tariff Commitments in Annex 2-1 as if the provisional measure had never applied.
Article 5.6. Notification and Consultation
1. A Party shall promptly notify the other Party, in writing, upon:
(a) initiating an investigation under Article 5.4 (Investigation);
(b) making a finding of serious injury or threat thereof caused by increased imports of an originating product of the other Party as a result of the reduction or elimination of a customs duty on the product pursuant to this Agreement;
(c) taking a decision to apply or extend a safeguard measure, or to apply a provisional measure; and
(d) taking a decision to progressively liberalise a safeguard measure previously applied.