Title

COMPREHENSIVE ECONOMIC PARTNERSHIP AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED ARAB EMIRATES AND THE GOVERNMENT OF THE KINGDOM OF CAMBODIA

Preamble

PREAMBLE

The Government of the United Arab Emirates (hereinafter referred to as the "UAE") and the Government of the Kingdom of Cambodia (hereinafter referred to as "Cambodia"); hereinafter referred to individually as a "Party" and collectively as "the Parties;"

RECOGNISING the strong economic and political ties between the UAE and Cambodia, and wishing to strengthen these links through the creation of a free trade area, thus establishing close and lasting relations;

DETERMINED to build on their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization;

CONSCIOUS of the dynamic and rapidly changing global environment brought about by globalisation and technological progress that presents various economic and strategic challenges and opportunities to the Parties;

DETERMINED to develop and strengthen their economic and trade relations through the liberalisation, facilitation, and expansion of trade in goods and services and investment in their common interest and for their mutual benefit;

AIMING to promote transfer of technology and expand trade;

CONVINCED that the establishment of a free trade area will provide a more favorable, secure and predictable climate for the promotion and development of economic and trade relations between the Parties; AIMING to facilitate trade by promoting efficient and transparent customs procedures that reduce costs and ensure predictability for their importers and exporters;

DETERMINED to support the growth and development of micro, small and medium-sized enterprises by enhancing their ability and capacity to participate in and benefit from the opportunities created by this Agreement;

AIMING to establish a clear, transparent, and predictable legal and commercial framework for business planning, that supports further expansion of trade and investment; and

RECOGNIZING their right to regulate and resolved to preserve the flexibility of the Parties to set legislative and regulatory priorities, and protect legitimate public welfare objectives, such as health, safety, environmental protection, conservation of living or non-living exhaustible natural resources, integrity and stability of the financial system, and public morals, in accordance with the rights and obligations provided in this Agreement;

HAVE AGREED, in pursuit of the above, to conclude the following Agreement (hereinafter referred to as "this Agreement"):

Body

Chapter 1. INITIAL PROVISIONS AND GENERAL DEFINITIONS

Article 1.1. Establishment of a Free Trade Area

The Parties hereby establish a free trade area, in accordance with the Decision of 28 November 1979 on Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries (Enabling Clause) and Article V of the General Agreement on Trade in Services ("GATS") and to promote opportunities for market access and trade liberalization for goods, services and investments; strengthen development of the digital economy; and deepen economic cooperation between the Parties.

Article 1.2. General Definitions

For the purposes of this Agreement:

Agreement on Agriculture means the Agreement on Agriculture in Annex IA to the WTO Agreement;

Anti-Dumping Agreement means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 in Annex IA to the WTO Agreement;

Customs administration means the Federal Authority ofldentity, Citizenship, Customs and Port Security for the UAE, and the General Department of Customs and Excise of Cambodia for Cambodia;

Customs Valuation Agreement means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 in Annex 1 A to the WTO Agreement;

Days means calendar days, including weekends and holidays;

DSU means the Understanding on Rules and Procedures Governing the Settlement of Disputes in Annex 2 to the WTO Agreement;

GATS means the General Agreement on Trade in Services in Annex 1B to the WTO Agreement;

GATT 1994 means the General Agreement on Tariffs and Trade 1994 in Annex 1 A to the WTO Agreement;

GPA means the Agreement on Government Procurement in Annex 4 to the WTO Agreement; 

Harmonized System or HS means the Harmonized Commodity Description and Coding System, including its General Rules for the Interpretation, Section Notes, Chapter Notes and Subheading Notes;

Import Licensing Agreement means the Agreement on Import Licensing Procedures in Annex 1 A to the WTO Agreement;

Joint Committee means the Joint Committee established pursuant to Article 16.1 (Joint Committee);

Measure means any measure, whether in form of a law, regulation, rule, procedure, decision, administrative action, or any other form;

Safeguards Agreement means the Agreement on Safeguards in Annex IA to the WTO Agreement;

SCM Agreement means the Agreement on Subsidies and Countervailing Measures in Annex 1 A to the WTO Agreement;

SPS Agreement means the Agreement on the Application of Sanitary and Phytosanitary Measures in Annex IA to the WTO Agreement;

TBT Agreement means the Agreement on Technical Barriers to Trade in Annex lA to the WTO Agreement;

TRIPS Agreement means the Agreement on Trade-Related Aspects of Intellectual Property Rights in Annex 1 C to the WTO Agreement;

WTO means the World Trade Organization; and

WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh, 15 April 1994.

Article 1.3. Objectives

The objectives of this Agreement are to liberalise and facilitate trade and investment between the Parties in accordance with the provisions of this Agreement.

Article 1.4. Geographical Scope

This Agreement shall apply: For the UAE, its land territories, internal waters, including its Free Zones, territorial sea, including, the seabed, and subsoil thereof, and airspace over such territories and waters, as well as the contiguous zone, the continental shelf and exclusive economic zone, over which UAE has sovereignty, sovereign rights or jurisdiction as defined in its laws, and in accordance with international law. For the Kingdom of Cambodia, the territory of the Kingdom of Cambodia, as well as those maritime areas, including the seabed and subsoil adjacent to the outer limits of the territorial sea and airspace over which the Kingdom of Cambodia exercises, in accordance with international law, sovereign rights or jurisdiction.

Article 1.5. Relation to other Agreements

1. The Parties affirm their existing rights and obligations with respect to each other under the WTO Agreement and other agreements to which such Parties are party. 2. In the event of any inconsistency between this Agreement and other agreements to which both Parties are party, the Parties shall immediately consult with each other with a view to finding a mutually satisfactory solution.

Article 1.6. Central and Local Government

1. Each Party shall take such reasonable measures as may be available to it to ensure observance of the provisions of this Agreement by the central, and where applicable by local governments and authorities and by non�governmental bodies in the exercise of governmental powers delegated by central, local governments and authorities within its territories. 2. This provision is to be interpreted and applied in accordance with the principles set out in paragraph (12) of Article XXIV of the GATT 1994 and paragraph (3) of Article I of the GATS.

Article 1.7. Transparency

1. Each Party shall publish or otherwise make publicly available their laws, regulations, as well as their respective international agreements which may affect the operation of this Agreement. 2. Without prejudice to Article 1.8, each Party shall respond with reasonable period of time to specific questions and provide, upon request, information to each other on matters referred to in paragraph 1.

Article 1.8. Confidential Information

1. Each Party shall, in accordance with its laws and regulations, maintain the confidentiality of information designated as confidential by the other Party. 2. Nothing in this Agreement shall require a Party to disclose confidential information, the disclosure of which would impede law enforcement of the Party, or otherwise be contrary to the public interest, or which would prejudice the legitimate commercial interests of any economic operator.

Chapter 2.

Article 2.1. Definitions

For the purposes of this Chapter:

Customs duty refers to any duty or charge of any kind imposed in connection with the importation of a product, including any form of surtax or surcharge in connection with such importation, but does not include any:

(a) charge equivalent to an internal tax imposed in conformity with Article III of the GATT 1994;

(b) anti-dumping or countervailing duty that is applied consistently with Article VI of the GATT 1994, the Anti-Dumping Agreement, and the SCM Agreement; or

(c) fee or other charges in connection with importation commensurate with the cost of services rendered and which does not represent a direct or indirect protection for domestic goods or taxation of imports for fiscal purposes;

Import licensing means an administrative procedure requiring the submission of an application or other documentation (other than that generally required for customs clearance purposes) to the relevant administrative body as a pnor condition for importation into the territory of the importing Party; and

Inward processing means customs procedure under which certain goods can be brought into a Customs territory conditionally relieved from the payment of import duties and taxes, on the basis that such goods are intended for manufacturing, processing or repair and subsequent exportation.

Article 2.2. Scope

Except as otherwise provided in this Agreement, this Chapter shall apply to trade in goods between the Parties.

Article 2.3. National Treatment

The Parties shall accord national treatment to the goods of the other Party in accordance with Article III of the GATT 1994, including its interpretative notes. To this end, Article III of the GATT 1994 and its interpretative notes are incorporated into and form part of this Agreement, mutatis mutandis.

Article 2.4. Reduction or Elimination of Customs Duties

1. Except as otherwise provided in this Agreement, including as explicitly set out in each Party's schedule included in Annex 2 (Schedules of Tariff Commitments), neither Party shall increase any existing customs duty, or adopt any new customs duty, on an originating goods of the other Party.

2. Upon the entry into force of this Agreement, Cambodia shall eliminate or reduce its customs duties applied on goods originating from the UAE in accordance with Annex 2A (Cambodia Schedule of Tariff Commitments) and the UAE shall eliminate or reduce its customs duties on goods originating from Cambodia in accordance with Annex 2B (UAE Schedule of Tariff Commitments).

3. Where a Party reduces its most-favored-nation (hereinafter "MFN") applied rate of customs duty, that duty rate shall apply to an originating good of the other Party if, and for as long as, it is lower than the customs duty rate on the same good calculated in accordance with Annex 2A (Cambodia Schedule of Tariff Commitments) in the case of Cambodia or Annex 2B (UAE Schedule of Tariff Commitments) in the case of the UAE.

Article 2.5. Acceleration or Improvement of Tariff Commitments

1. Upon request of a Party, the other Party shall consult with the requesting Party to consider accelerating or improving, the scope of the elimination of customs duties as set out in their schedule of tariff commitments in Annex 2 (Schedules of Tariff Commitments).

2. Further commitments between the Parties to accelerate or improve the scope of the elimination of customs duty on a good (or to include a good in Annex 2 (Schedules of Tariff Commitments)) shall supersede any duty rate or staging category determined pursuant to their respective Schedules upon its incorporation into this Agreement.

3. Nothing in this Agreement shall prohibit a Party from unilaterally accelerating or improving the scope of the elimination of customs duty set out in its Schedule in Annex 2 (Schedules of Tariff Commitments) on originating goods. Any such unilateral acceleration or improving the scope of the elimination of customs duty will not permanently supersede any duty rate or staging category determined pursuant to their respective Schedules nor serve to waive that Party's right to raise the customs duty back to the level established in its Schedule in Annex 2 (Schedules of Tariff Commitments) following a unilateral reduction. 

Article 2.6. Classification of Goods and Transposition of Schedules

1. The classification of goods in trade between the Parties shall be that set out in the respective tariff nomenclature of each Party in conformity with the Harmonized System (HS) and its legal notes and amendments.

2. Each Party shall ensure that the transposition of its Schedules of Tariff Commitments does not afford less favourable treatment to an originating good of the other Party than that set out in its Schedule in Annex 2A (Cambodia Schedule of Tariff Commitments) or Annex 2B (UAE Schedule of Tariff Commitments).

3. The transposition of the Schedule shall be carried out in accordance with the methodologies and guidelines which are to be adopted by the Sub-Committee on Trade in Goods.

4. A Party may introduce new tariff splits, provided that the preferential conditions applied in the new tariff splits are not less preferential than those applied originally.

Article 2.7. Import and Export Restrictions

Except as otherwise provided in this Agreement, neither Party may adopt nor maintain any prohibition or restriction on the importation of any goods of the other Party or on the exportation or sale for export of any goods destined for the territory of the other Party, except in accordance with Article XI of the GATT 1994 and its interpretative notes. To this end, Article XI of the GATT 1994 and its interpretative notes are incorporated into and made a part of this Agreement, mutatis mutandis.

Article 2.8. Import Licensing

1. Neither Party may adopt or maintain a measure that is inconsistent with the Import Licensing Agreement, (1) which is hereby incorporated into and made part of this Agreement, mutatis mutandis.

2. Before applying any new or modified import licensing procedure, a Party shall publish it in such a manner as to enable governments and traders to become acquainted with it, including through publication on an official government internet site. Upon request of the other Party, the Party shall exchange information concerning its implementation in a reasonable period.

Article 2.9. Customs Valuation

The Parties shall determine the customs value of goods traded between them in accordance with the provisions of Article VII of the GAJT 1994 and the Customs Valuation Agreement, mutatis mutandis.

Article 2.10. Export Subsidies

Neither Party shall adopt or maintain any export subsidy on any good destined for the territory of the other Party in accordance with the SCM Agreement and the Agreement on Agriculture.

Article 2.11. 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. Any such measures taken for trade in goods shall be in accordance with Article XII of the GATT 1994 and the Understanding on the Balance-of-Payments Provisions of the GATT 1994, the provisions of which are incorporated into and form part of this Agreement, mutatis mutandis. 

Article 2.12. Administrative Fees and Formalities

1. Each Party shall ensure, in accordance with Article VIII: 1 of the GATT 1994 and its interpretive notes and Article 6 of the WTO Agreement on Trade Facilitation, that all fees and charges of whatever character (other than import and export duties, charges equivalent to an internal tax or other internal charges applied consistently with Article III:2 of the GATT 1994, and anti-dumping and countervailing duties) imposed on, or in connection with, importation or exportation of goods are limited in amount to the approximate cost of services rendered, which shall not be calculated on an ad valorem basis, and shall not represent an indirect protection to domestic goods or a taxation ofimports or exports for fiscal purposes.

2. Each Party shall promptly publish details and shall make such information available on the internet regarding the fees and charges it imposes in connection with importation or exportation.

Article 2.13. Non-Tariff Measures

1. Unless otherwise provided, neither Party shall adopt or maintain any non-tariff measure on the importation of any goods of the other Party or on the exportation of any goods destined for the territory of the other Party, except in accordance with its WTO rights and obligations or this Agreement.

2. Each Party shall ensure that its laws, regulations, procedures and administrative rulings relating to non-tariff measures are not prepared, adopted, or applied with the view to, or with the effect of, creating unnecessary obstacles to trade with the other Party.

3. If a Party considers that a non-tariff measure of the other Party is creating an unnecessary obstacle to trade, that Party may nominate such a non-tariff measure for review by the Sub-Committee on Trade in Goods by notifying through a written request letter, which shall be submitted at least 30 days before the date of the next scheduled meeting of the Sub-Committee on Trade in Goods. A nomination of a non-tariff measure for review shall include reasons for its nomination, how the measure adversely affects trade between the Parties, and if possible, suggested solutions. The Sub-Committee on Trade in Goods shall immediately review the measure with a view to securing a mutually agreed solution to the matter. Review by the Sub-Committee on Trade in Goods is without prejudice to the Parties' rights under Chapter 14 (Dispute Settlement).

Article 2.14. State Trading Enterprises

Nothing in this Agreement shall be construed to prevent a Party from maintaining or establishing a state trading enterprise in accordance with Article XVII of the GATT 1994 and the Understanding on the Interpretation of Article XVII of the GATT 1994, mutatis mutandis.

Article 2.15. Temporary Admission of Goods

1. Each Party shall, in accordance with its respective domestic law, grant temporary admission free of customs duties for the following goods imported from the other Party, regardless of their origin:

(a) professional and scientific equipment, including their spare parts, equipment for the press or television, software, and broadcasting and cinematographic equipment that are necessary for carrying out the business activity, trade, or profession of a person who qualifies for temporary entry pursuant to the laws of the importing Party; 

(b) goods intended for display, demonstration, or use at theaters, exhibitions, fairs, or other similar events;

(c) commercial samples and advertising films and recordings;

(d) goods admitted for sports purposes;

(e) containers and pallets that are used for the transportation of equipment or used for refilling; and

(f) goods entered for inward processing.

2. Each Party shall, at the request of the importer and for reasons deemed valid by its Customs Authority, extend the time limit for temporary admission beyond the period initially fixed.

3. Neither Party may condition the temporary admission of a good referred to in paragraph 1, other than to require that the good:

(a) not be sold or leased while in its territory;

(b) be accompanied by a security in an amount no greater than the custom duties and any other tax imposed on imports that would otherwise be owed on entry or final importation, releasable on the exportation of the good;

(c) be capable of identification when exported;

(d) be exported in accordance with the time period granted for temporary admission in accordance with its domestic law related to the purpose of the temporary admission;

(e) not be admitted in a quantity greater than is reasonable for its intended use; or

(f) be otherwise admissible into the importing Party's territory under its law.

4. If any condition that a Party imposes under paragraph 3 has not been fulfilled, that Party may apply the customs duty and any other tax or charge that would normally be owed on the importation of the good and any other charges or penalties provided for under its law.

5. Each Party through its Customs Authority shall adopt and maintain procedures providing for the expeditious release of goods admitted under this Article. To the extent possible, such procedures shall provide that when such a good accompanies a national or resident of the other Party who is seeking temporary entry, the good shall be released simultaneously with the entry of that national or resident.

6. Each Party shall permit a good temporarily admitted under this Article to be exported through a customs port other than that through which it was admitted in accordance with its customs procedures.

7. Each Party shall provide that the importer of a good admitted under this Article shall not be liable for failure to export the good on presentation of satisfactory proof to the importing Party that the good has been destroyed within the original period fixed for temporary admission or any lawful extension. A Party may condition relief of liability under this paragraph by requiring the importer to receive prior approval from the Customs Authority of the importing Party before the good can be so destroyed.

Article 2.16. Goods Re-Entered after Repair or Alteration

1. Neither Party shall apply a customs duty to a good, regardless of its origin, that re-enters its territory in accordance with its laws and procedures after that good has been temporarily exported from its territory to the territory of the other Party for repair or alteration, regardless of whether such repair or alteration could be performed in the territory from which the good was exported, except that customs duty or other taxes may be applied to the addition resulting from the repair or alteration that was performed in the territory of the other Party.

2. Neither Party shall apply a customs duty to a good, regardless of its origin, imported temporarily from the territory of the other Party for repair or alteration.

3. For purposes of this Article, "repair" or "alteration" does not include an operation or process that:

(a) destroys a good's essential characteristics or creates a new or commercially different good;

(b) transforms an unfinished good into a finished good; or

(c) results in a change of the classification at a six-digit level of the Harmonized System (HS).

Article 2.17. Duty-Free Entry of Commercial Samples of Negligible Value and Printed Advertising Materials

Each Party, in accordance with its respective domestic law, shall grant duty-free entry to commercial samples of negligible value, and to printed advertising materials, imported from the territory of the other Party, regardless of their origin, but may require that: (a) such samples be imported solely for the solicitation of orders for goods or services provided from the territory of the other Party or a non-Party; or (b) such advertising materials be imported in packets, that each contains no more than one copy of each such material, and that neither the materials nor the packets form part of a larger consignment.

Article 2.18. Sub-Committee on Trade In Goods

1. The Parties hereby establish a Sub-Committee on Trade in Goods under the Joint Committee comprising representatives of each Party.

2. The Sub-Committee shall meet once a year or meet at the request of the other Party at a mutually agreed time, venue, and means, to consider any matter arising under this Chapter. The Sub-Committee may carry out its work through whatever means that are appropriate, which may include electronic mail, videoconferencing, or other means.

3. The functions of the Sub-Committee shall include, inter alia:

(a) monitoring and reviewmg the implementation and administration of this Chapter, and making reports and recommendations, if appropriate;

(b) promoting trade in goods between the Parties, including through consultations on accelerating or improving the scope of preferential treatment or tariff elimination under this Agreement and other issues as appropriate;

(c) addressing barriers to Trade in Goods between the Parties including those related to the application of non-tariff measures which may restrict trade in goods between the Parties and, if appropriate, referring such matters to the Joint Committee for its consideration;

(d) providing advice and recommendations to the Joint Committee on cooperation needs regarding Trade in Goods matters;

(e) reviewing the amendments to the Harmonized System (HS) to ensure that each Party's obligations under this Agreement are not altered, and consulting to resolve any conflicts between such amendments to the Harmonized System (HS) and Annex 2 (Schedules of Tariff Commitments) and national nomenclatures;

(f) consulting on and endeavoring to resolve any difference that may arise among the Parties on matters related to the classification of goods under the Harmonized System (HS), including adoption and review of transposition methodologies and guidelines;

(g) reviewing data on trade in goods m relation to the implementation of this Chapter;

(h) assessing matters that relate to trade in goods and undertaking any additional work that the Joint Committee may assign to it; and

(i) reviewing and monitoring any other matter related to the implementation of this Chapter. 

CHAPTER3 RULES OF ORIGIN 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, finger lings 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: (a) for the Kingdom of Cambodia, the Ministry of Commerce or the General Department of Customs and Excise of Cambodia, Ministry of Economy and Finance or any other agency notified from time to time; and (b) for the UAE, the Ministry of Economy or any other agency notified from time to time; Consignment means products which are either sent simultaneously from one exporter to one consignee or covered by a single transport document covering their shipment from the exporter to the consignee; Customs authority refers to: (a) for the Kingdom of Cambodia, the General Department of Customs and Excise of Cambodia, Ministry of Economy and Finance; and (b) for the UAE, the Federal Authority for Identity, Citizenship, Customs, and Port Security; Customs value refers to the price actually paid or payable to the exporter for a product when the product is loaded out of the carrier, at the port of importation, including the cost of the product, insurance, and freight necessary to deliver the product to the named port of destination. The valuation shall be made in accordance with Article VII of the GATT 1994, including its notes and supplementary provision thereof; and the Customs Valuation Agreement; Generally accepted accounting principles refers to the recognised consensus or substantial authoritative support 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. These standards may 3-1

encompass broad guidelines of general application as well as detailed standards, practices and procedures; Good refers to any merchandise, product, article, or material; Harmonized System ("HS") refers to the Harmonized Commodity Description and Coding System, including its general rules and legal notes set out in the Annex to the International Convention on the Harmonized Commodity Description and Coding System; Manufacture refers to any kind of working or processing, including assembly or specific operations; Material refers to any ingredient, raw material, compound or part, etc., used in the production of a good; Non-originating good refers to a good that does not qualify as originating under this Chapter; Non-originating material (NOM) refers to any materials whose country of origin is a country other than the Parties (imported non-originating), any materials whose origin cannot be determined (undetermined origin) or a material that does not qualify as originating under this Chapter; Originating goods / originating material refers to goods or materials that qualify as originating under this Chapter; Product refers to that which is obtained by growing, ra1smg, mmmg, harvesting, fishing, aquaculture, trapping, hunting, extracting or manufactured, even if it is intended for later use in another manufacturing operation; and Production refers to growing, raising, mining, harvesting, fishing, farming, breeding, extracting, gathering, collecting, capturing, aquaculture, trapping, hunting, manufacturing, producing, processing, or assembling a good. Section A: Origin Determination Article 3.2: Originating Goods For the purposes of implementing this Agreement, goods shall be considered as originating in territory of a Party, if: (a) goods are wholly obtained or produced there according to Article 3.3; 3-2

' t===== (b) goods are not wholly obtained or produced entirely there, provided that the good has undergone sufficient transformation according to Article 3 .4; ( c) goods produced entirely there exclusively from originating materials of any of the Parties; or (d) goods satisfied all other applicable requirements of this Chapter. Article 3.3: Wholly Obtained or Produced Goods For the purposes of Article 3.2 (a), the following goods shall be deemed to be wholly obtained or produced in the territory of a Party: (a) plant and plant products grown, collected and harvested there; (b) live animals born and raised there; ( c) products obtained from live animals there; ( d) mineral product and natural resources extracted or taken from that Party's soil, subsoil, waters, seabed, or beneath the seabed; (e) product obtained from hunting, trapping, collecting, capturing, fishing, or aquaculture conducted there; (f) fish, shellfish, and other marine life taken by vessels registered with the Party and entitled to fly its flag, and other products taken by the Party or a person of that Party, from the waters, seabed or beneath the seabed outside the territorial waters of the Party, provided that the Party has the rights to exploit the natural resources of such waters, seabed and beneath the seabed under international law; (g) fish, shellfish, and other marine life taken from the high seas by vessels registered with the Party and entitled to fly its flag; (h) goods produced or made on board factory ships registered with a Party and entitled to fly its flag, exclusively from products referred to in subparagraph (f) through (g); (i) raw materials recovered from used goods collected there; U) waste or scrap resulting from utilization, consumption, or manufacturing operations conducted there, fit only for recovery ofraw materials; and 3-3

(k) product produced or obtained there exclusively from product referred to in subparagraphs (a) through (j), or from their derivatives, at any stage of production. Article 3.4: Sufficient Working or Production 1. For the purposes of Article 3.2 (b), a good shall be deemed to be originating if the good satisfies any of the following: (a) a Change in Tariff Heading (CTH), which means that all non�originating materials used in the production of the good have undergone a change in HS tariff classification at the 4-digit level; (b) a Qualifying Value Content ( Q V C) not less than 40% of the FOB value; or (c) a Qualifying Value Content (QVC) not less than 35% of the Ex�Works Value. 2. Notwithstanding paragraph 1, if the good falls within the classifications included in exception list in Annex 3A (Product Specific Rules) (hereinafter referred to as PSR), then the good shall fulfill the specific rule detailed therein. 3. For the purposes of paragraph 1, the QVC shall be calculated using any of the following methods: (a) (b) where: QVC = ExWorks Value or POB Value-\1.N.M * lOO or ExWorks Value or FOB Value QVC = V.O.M+Dtrecc labour cost+Direct overhead cost+Proflt..+ocher costs* lOO exWorks or !'OB Value (i) QVC is the qualifying value content of a good expressed as a percentage; (ii) FOB is 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; (iii) Ex-Works Value is the price paid for the good ex-works to the manufacturer in the Parties in whose undertaking the last working or processing is carried out, provided the price includes the value of all the materials used, minus 3-4

? L any internal taxes which are, or may be, repaid when the good obtained is exported; (iv) V.N.M is the CIF/Customs value of the non-originating materials at the time of importation or the earliest ascertained price paid or payable in the Party where the production takes place for all non-originating materials, parts or produce that are acquired by the producer in the production of the good. When the producer of a good acquires non-originating materials within that Party the value of such materials shall not include freight, insurance, packing costs and any other costs incurred in transporting the material from the supplier's warehouse to the producer's location; (v) VOM is the value of originating materials, parts, or produce acquired or self-produced, and used in the production of the good; (vi) Direct Labour Cost includes wages, remuneration, and other employee benefits; (vii) Direct Overhead Cost is the total overhead expense; and (viii) Other Costs are the costs incurred in placing the good in the ship or other means of transport for export including, but not limited to. domestic transport costs, storage and warehousing, port handling, brokerage fees and service charges. This cost is only applicable when calculating QVC on FOB basis. Article 3. 5: Intermediate Goods For a non-originating material that undergoes sufficient production in the territory of a Party as provided in Article 3.4, the resulting good shall be considered as originating and no account shall be taken of the non-originating material contained therein when that good is used in the subsequent production of another good. Article 3. 6: Accumulation An originating good of a Party which is used in the processing or production in the territory of the other Party as material for finished goods shall be deemed as a material originating in the territory of the latter Party where the working or processing of the finished goods has taken place. 3-5

2. Notwithstanding subparagraph 1, an originating material from a Party that does not undergo processing beyond the minimal or insufficient operations listed in Article 3. 8 in the other Party shall retain its originating status of the former Party. 3. The Joint Committee established under Article 16.1 (Joint Committee) may agree to review this Article with a view to providing for other forms of accumulation for the purposes of qualifying goods as originating goods under this agreement. Article 3.7: Tolerance (De Minimis) 1. Notwithstanding Article 3.4, A good will 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 10% of the FOB price or 15% of the Ex-Works price of the good. 2. The value of non-originating materials referred to in paragraph 1 shall be included in the value of the non-originating materials for any applicable value-added content requirement. Article 3.8: Minimal/Insufficient Operations and Processes 1. Whether or not the requirements of Article 3.4 are satisfied, a good shall not be considered to be originating in the territory of a Party if the following operations are undertaken exclusively by itself or in combination in the territory of that Party: (a) slaughter of animals; (b) operations to ensure the preservation of products in good condition during transport and storage such as drying, freezing, ventilation, chilling and like operations; (c) simple processes, consisting of sifting, screening, sorting, washing, classifying, sharpening, cutting, slitting, grinding, bending, coiling, uncoiling, or slicing; ( d) cleaning, including removal of oxide, oil, paint or other coverings; (e) simple painting and polishing operations; (f) simple testing or calibration; 3-6

(g) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations; (h) simple mixing of goods, whether or not of different kinds; (i) simple assembly of parts of products to constitute a complete good or disassembly of products into parts; (j) changes of packaging, unpackaging or repackaging operations, and breaking up and assembly of consignments; (k) affixing or printing marks, labels, logos and other like distinguishing signs on goods or their packaging; (1) husking, partial or total bleaching, polishing and glazing of cereals and rice; and (m) mere dilution with water or another substance that does not materially alter the characteristics of the goods. 2. For the purposes of paragraph 1, the term "simple" will be defined as following: (a) "Simple" generally describes an activity which does not need special skills, machines, apparatus or equipment especially produced or installed for carrying out the activity; (b) "Simple mixing" generally describes an activity which does not need special skills, machine, apparatus or equipment especially produce or install for carrying out the activity. However, simple mixing does not include chemical reaction. Chemical reaction means a process (including a biochemical process) which results in a molecule with a new structure by breaking intramolecular bonds and by forming new intramo lecular bonds, or by altering the spatial arrangement of atoms in a molecule. Article 3. 9: Indirect Materials In order to determine whether a good originates, the following material used in the production of a good shall be treated as originating material, irrespective of whether such material is originated: (a) energy and fuel; (b) plant and equipment; 3-7