Article 2.15. Export Duties, Taxes, or other Charges
Except as otherwise provided in this Agreement, neither Party shall adopt or maintain any duty, tax, or other charge on the export of any good destined to the territory of the other Party.
Article 2.16. State Trading Enterprises
The Parties affirm their existing rights and obligations under Article XVII of the GATT 1994, its interpretative notes, and the Understanding on the Interpretation of Article XVII of the GATT 1994, contained in Annex 1A to the WTO Agreement.
Section E. Other Measures
Article 2.17. Restrictions to Safeguard the Balance of Payments
1. The Parties shall endeavour to avoid the imposition of restrictive measures for balance-of-payments purposes.
2. The rights and obligations of the Parties relating to restrictions to safeguard the balance of payments shall be in accordance with the GATT 1994, which includes the Understanding on the Balance-of-Payments Provisions of the GATT 1994, contained in Annex 1A of the WTO Agreement.
Section F. Institutional Provisions
Article 2.18. Subcommittee on Trade In Goods
1. The Parties herby establish a Subcommittee on Trade in Goods, comprising representatives of each Party.
2. The Subcommittee shall meet upon request of a Party or the Joint Committee to consider any matter arising under this Chapter.
3. The Subcommittee's functions shall include, inter alia:
(a) monitoring the implementation and administration of this Chapter;
(b) promoting trade in goods between the Parties, including through consultations on broadening and accelerating the reduction or elimination of customs duties under this Agreement and other issues as appropriate;
(c) addressing barriers to trade in goods between the Parties, especially those related to the application of non-tariff measures, and, when appropriate, referring such matters to the Joint Committee for its consideration; and
(d) providing a forum for discussion or the exchange of information, including trade data, on matters related to subparagraphs (a) through (c), which may directly or indirectly affect trade between the Parties, with a view to eliminating their negative effects on trade and seeking mutually acceptable alternatives.
(e) considering any other matter arising under this Chapter as may be agreed by the Parties.
Chapter 3. RULES OF ORIGIN
Section A. ORIGIN DETERMINATION
Article 3.1. Definitions
For the purposes of this Chapter:
aquaculture refers to the farming of aquatic organisms including fish, molluscs, crustaceans, other aquatic invertebrates and aquatic plants, from seedstock such as eggs, fry, fingerlings and larvae, by intervention in the rearing or growth processes to enhance production, such as, inter alia, regular stocking, feeding, and protection from predators;
Competent Authority refers to the Customs Directorate of the Israel Tax Authority of the Ministry of Finance in the case of Israel, and to the Ministry of Economy in the case of the UAE;
Ex-Works Price is the price paid for the good ex-works to the manufacturer in a Party in whose undertaking the last working or processing is carried out, provided the price includes the value of all the materials used, minus any internal taxes which are, or may be, repaid when the good obtained is exported;
good refers to both materials and products;
manufacture refers to any kind of working or processing, including assembly or specific operations;
material refers to any ingredient, raw material, compound or part, used in the production of a good;
non-originating good or non-originating material means a good or material that does not qualify as originating under this Chapter;
Article 3.2. Originating Goods
For the purpose of implementing this Agreement, the following goods shall be considered as originating in a Party:
(a) goods wholly obtained or produced there according to Article 3.3;
(b) goods produced there exclusively from originating materials; or
(c) goods that have undergone sufficient working or production there according to Article 3.4.
Article 3.3. Wholly Obtained or Produced Goods
The following goods shall be considered as wholly obtained or produced in a Party:
(a) mineral goods and naturally occurring substances extracted or taken from the soil, waters, seabed or subsoil of a Party;
(b) plants, plant goods and vegetable goods grown, harvested, picked or gathered there;
(c) live animals born and raised there;
(d) goods obtained from live animals there;
(e) goods obtained by hunting, trapping, collecting, fishing, farming, capturing or aquaculture conducted within the land, the internal waters or within the territorial sea of a Party;
(f) goods of sea fishing and other marine goods taken from the waters, seabed or subsoil outside the territorial sea of a Party only by a vessel registered or recorded in a Party and entitled to fly its flag;
(g) goods produced or made on board a factory ship exclusively from goods referred to in subparagraph (f) of this Article, provided such factory ship is registered or recorded in a Party and entitled to fly its flag;
(h) goods, other than goods of sea fishing and other marine goods, taken or extracted from the waters, seabed or the subsoil outside the territorial sea of a Party, provided that the Party has rights to exploit such waters, seabed or subsoil;
(i) used articles collected there which are fit only for disposal or recovery of raw materials;
(j) waste and scrap resulting from utilization, consumption or manufacturing operations conducted there which are fit only for disposal or recovery of raw materials; and
(k) goods produced there exclusively from goods referred to in subparagraphs (a) through (j) of this Article, or from their derivatives, at any stage of production.
Article 3.4. Sufficient Working or Production
For the purposes of Article 3.2 (c), goods are considered to be sufficiently worked or processed when the conditions set out in the Product Specific Rules ("PSR") in Annex 3A (Product Specific Rules) are fulfilled.
Article 3.5. Intermediate Goods
If a good which has acquired originating status by fulfilling the conditions set out in Article 3.4 is used in the manufacture of another good, no account shall be taken of the non-originating materials which may have been used in its manufacture.
Article 3.6. De Minimis
Notwithstanding Article 3.4: A good shall be considered to have undergone a change in tariff classification if the value of all non-originating materials that are used in the production of the good and that do not undergo the applicable change in tariff classification does not exceed 15 percent of the Ex-Works price of the good.
A good provided for in Chapters 50 to 63 of the HS Code shall be considered to have undergone a change in tariff classification if the weight of all non-originating materials that are used in the production of the good and that do not undergo the applicable change in tariff classification does not exceed 15 percent of the weight of the good.
Article 3.7. Neutral Elements
In order to determine whether a good is an originating good, no account shall be taken of the origin of the following neutral elements which might be used in its manufacture:
(a) fuel and energy;
(b) plants, equipment and their spare parts;
(c) tools, dyes, and molds;
(d) equipment, devices, supplies used for testing or inspecting the goods;
(e) goods which do not enter into and which are not intended to enter into the final composition of the good.
Article 3.8. Cumulation
1. Originating goods in a Party shall be considered as originating in the other Party when used in the production of other goods there.
2. The Joint Committee may agree to review this Article with a view to providing for other forms of cumulation for the purposes of qualifying goods as originating goods under this Agreement.
Article 3.9. Insufficient Operations or Processing
1. The following operations shall be considered as insufficient working or processing to confer the status of originating goods, whether or not the requirements of Article 3.4 are satisfied:
(a) preserving operations to ensure that the goods remain in good condition during transport and storage;
(b) simple (2) changing of packaging or breaking-up and assembly of packages;
(c) washing, cleaning, removal of dust, oxide, oil, paint or other coverings;
(d) simple painting and polishing operations, including applying oil;
(e) husking, partial or total bleaching, polishing, and glazing of cereals and rice;
(f) ironing or pressing of textiles;
(g) operations to colour sugar or form sugar lumps;
(h) peeling, stoning and shelling, of fruits, nuts and vegetables;
(i) sharpening, simple grinding, or simple cutting;
(j) sifting, screening, sorting, classifying, grading or matching (including the making-up of sets of articles);
(k) affixing or printing marks, labels, logos and other like distinguishing signs on goods or their packaging;
(l) simple dilution in water or other substances, providing that the characteristics of the goods remain unchanged;
(m) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple (2) packaging operations;
(n) simple assembly of parts of articles to constitute a complete article or disassembly of goods into parts;
(o) simple mixing (3) of goods, whether or not of different kinds;
(p) slaughter of animals; or
(q) a combination of two or more of the above operations.
2. All operations carried out in either Party on a given good shall be considered together when determining whether the working or processing undergone by that good is to be regarded as insufficient within the meaning of paragraph 1.
Article 3.10. Accessories, Spare Parts, and Tools
Each Party shall provide that accessories, spare parts, and tools dispatched with a piece of equipment, machine, apparatus or vehicle, which are part of the normal equipment and included in the price thereof or which are not separately invoiced, shall be regarded as one with the piece of equipment, machine, apparatus or vehicle in question.
Article 3.11. Unit of Qualification
1. The unit of qualification for the application of the provisions of this Chapter shall be the particular good which is considered as the basic unit when determining classification using the nomenclature of the Harmonized System (HS). It follows that:
(a) when a good composed of a group or assembly of articles is classified under the terms of the Harmonized System (HS) in a single heading, the whole constitutes the unit of qualification;
(b) when a consignment consists of a number of identical goods classified under the same heading of the Harmonized System (HS), each good must be taken individually when applying the provisions of this Chapter.
2. Where, under General Rule 5 of the Harmonized System (HS), packaging is included with the good for classification purposes, it shall be included for the purposes of determining origin.
Article 3.12. Sets
Sets, as defined in General Rule 3 of the Harmonized System (HS), shall be regarded as originating when all component goods are originating. Nevertheless, when a set is composed of originating and non-originating goods, the set as a whole shall be regarded as originating, provided that the value of the non-originating goods does not exceed 20 percent of the ex-works price of the set
Article 3.13. Accounting Segregation of Materials
1. For the purpose of determining if goods are originating where identical and interchangeable originating and non-originating materials are used in the manufacture of goods, those materials shall be physically segregated, according to their origin, during storage. Identical and interchangeable materials means materials being of the same kind and commercial quality, and which once they are incorporated into the finished goods cannot be distinguished from one another for origin purposes.
2. Where considerable cost or material difficulties arise in keeping separate stocks of originating and non-originating materials which are identical and interchangeable, a producer may use the so-called "accounting segregation" method to be used for managing such stocks.
3. The accounting method shall be recorded, applied, and maintained in accordance with generally accepted accounting principles applicable and recognised in the Party in which the goods are manufactured and must be able to ensure that for a specific reference period no more goods receive originating status than would be the case if the materials had been physically segregated.
4. A producer using accounting segregation pursuant to paragraphs 2 and 3 shall keep all documentary evidence of origin of the materials. At the request of the Competent Authority, the producer shall provide satisfactory information on how the stocks have been managed.
Article 3.14. Principle of Territoriality
1. The conditions for acquiring originating status set out in Article 3.2 must be fulfilled without interruption in either of the Parties.
2. Where originating goods exported from a Party to a non-Party return to the exporting Party, they must be considered as non-originating, unless it can be demonstrated to the satisfaction of the Customs Authority that:
(a) the returning goods are the same as those exported; and
(b) they have not undergone any operation beyond that necessary to preserve them in good condition while in that non-Party or while being exported.
Article 3.15. Outward Processing
Notwithstanding Article 3.14, the acquisition of originating status in accordance with the conditions set out in this Chapter shall not be affected by working or processing done outside a Party on materials exported from a Party and subsequently re-imported there, provided that:
(a) the said materials shall be wholly obtained in a Party or have undergone working or processing beyond the operations referred to in Article 3.9 prior to being exported;
(b) it shall be demonstrated to the satisfaction of the Customs Authority that:
(i) the re-imported goods have been obtained by working or processing the exported materials;
(ii) such working or processing have not resulted in a change of the classification at a four-digit level of the Harmonized System (HS) of the said re-imported goods; and
(iii) the total added value acquired outside a Party by applying the provisions of this Article does not exceed 15 percent of the ex-works price of the end good for which originating status is claimed.
(c) The provisions of subparagraph (b)(iii) shall not apply to goods which do not fulfil the conditions set out in Article 3.4;
(d) The conditions set out in Article 3.6 shall not apply to the said material as referred to in paragraph (a); and
(e) factual information relevant to this Article will be indicated in the Certificate of Origin, in accordance with Annex 3B (Certificate of Origin).
Article 3.16. Direct Transport
1. The preferential treatment provided under this Agreement shall apply only to goods satisfying the requirements of this Chapter, which are transported directly between the Parties. However, goods constituting one single consignment may be transported through other territories with, should the occasion arise, trans-shipment or temporary warehousing in such territories, under the surveillance of the customs authorities therein, provided that:
(a) they are not intended for trade, consumption, or use in the non-Party where the goods were in transit; and
(b) they do not undergo operations other than unloading, reloading, or any operation designed to preserve them in good condition.
2. Evidence that the conditions set out in paragraph 1 have been fulfilled shall be supplied to the Customs Authority of the importing Party by the production of:
(a) the transportation documents, such as the airway bill, the bill of lading or the multimodal or combined transportation document, that certify the transport from the country of origin to the importing country;
(b) a certificate issued by the Customs Authority of the non-Party where the goods were in transit, which contains an exact description of the goods, the date and place of the loading and re-loading of the goods in that non-Party, and the conditions under which the goods were placed; or
(c) in the absence of any of the above documents, any other documents that will prove the direct shipment.
Article 3.17. Free Zones
1. The Parties shall take all necessary steps to ensure that products traded under cover of a Proof of Origin which in the course of transport use a free zone situated within a Party, are not substituted by other goods and do not undergo handling other than normal operations designed to prevent their deterioration.
2. By means of an exemption to the provisions contained in paragraph 1, when products originating in a Party enter a free zone under cover of a Proof of Origin and undergo treatment or processing, the authorities concerned shall issue a new Proof of Origin at the exporter's request, if the treatment or processing undergone is in conformity with the provisions of this Chapter.
3. Products manufactured in a free zone situated within a Party, shall be considered products originating in that Party and eligible for the preferential treatment under this Agreement, when exported to the other Party, provided that:
(a) the treatment or processing undergone in the free zone is in conformity with the provisions of this Chapter; and
(b) the exporter applying for the issuance of a Proof of Origin shall submit at any time, at the request of the Competent Authority of the exporting Party, all appropriate documents proving the originating status of the products concerned as well as the fulfilment of the other requirements of this Chapter.
Section B. CERTIFICATION PROVISIONS
Article 3.18. Proof of Origin
1. Goods originating in a Party shall, on importation into the other Party, benefit from preferential tariff treatment under this Agreement upon submission of a Proof of Origin in accordance with the domestic law of the importing Party, which shall be completed in English.
2. Any of the following shall be considered as a Proof of Origin:
(a) a certificate of origin in paper format (4) issued by a Competent Authority as per the specimen in Annex 3B (Certificate of Origin);
(b) an electronic certificate of origin issued by a Competent Authority in accordance with Article 3.19;
(c) an origin declaration made out by an approved exporter referred to in Article 3.20.
Article 3.19. Electronic Origin Data Exchange
For the purposes of Article 3.18.2 (b), the Parties shall endeavour to develop an electronic system for the exchange of electronic certificates of origin (5) and origin information to ensure the effective and efficient implementation of this Chapter.
Article 3.20. Approved Exporter
1. This Article shall apply within one year from the date of entry into force of this Agreement.
2. The Competent Authority of the exporting Party may authorise any exporter (hereinafter referred to as "approved exporter"), who exports goods under this Agreement, to make out Origin Declarations, a specimen of which appears in Annex 3C (Approved Exporter Declaration Pursuant to Article 3.20), irrespective of the value of the goods concerned, in accordance with appropriate conditions in the respective law of the exporting Party. An exporter seeking such authorisation must offer to the satisfaction of the Competent Authority all guarantees necessary to verify the originating status of the goods as well as the fulfilment of the other requirements of this Chapter.
3. The Competent Authority may grant the status of approved exporter, subject to any conditions which it considers appropriate.
4. The Competent Authority shall issue a unique serial number to each approved exporter with a validity date.
5. The Parties shall periodically exchange the lists of approved exporters' names, serial numbers, and validity dates. In case a unique serial number of an approved exporter is not included in the list, the Customs Authority shall not deny preferential treatment unless Article 3.28 is applied.
6. An Origin Declaration shall be made out by the approved exporter by typing, stamping or printing on the invoice, delivery note or other commercial document, the declaration, the text of which appears in Annex 3C (Approved Exporter Declaration Pursuant to Article 3.20).
7. The approved exporter making out an Origin Declaration shall be prepared to submit at any time, at the request of the Customs Authority of the exporting Party, all appropriate documents proving the originating status of the goods concerned, as well as the fulfilment of the other requirements of this Chapter.
Article 3.21. Procedures for the Issuance of Certificates of Origin
1. Certificates of Origin shall be issued by the Competent Authority of the exporting Party, either upon an electronic application or an application in paper form, having been made by the exporter, producer, or an authorised representative under the exporter's responsibility, in accordance with the regulations of the exporting Party.