3. Where a Party considers it necessary to address an urgent problem related to animal or plant health protection, it may omit any of the steps set out in paragraphs 1 and 2 provided that, once an animal or plant health measure has been adopted:
(a) immediately notifies the other Party, in accordance with the requirements set out in paragraph 1(b), including a brief description of the urgent problem;
(b) provides a copy of the measure to the other Party or interested persons upon request; and
(c) without discrimination, allow the other Party and interested persons to make comments in writing and, upon request, discuss them and take into account the results of those discussions.
4. Each Party shall, except where necessary to address an urgent problem referred to in paragraph 3, allow a reasonable period to elapse between the publication of an animal or plant health measure of general application and the date of entry into force of the measure, in order to allow time for interested persons to adapt to the measure.
5. Each Party shall designate a governmental authority to be responsible for the implementation in its territory of the notification provisions of this Article and shall notify the other Party accordingly. Where a Party designates two or more governmental authorities for this purpose, it shall provide the other Party with complete and unambiguous information on the scope of responsibilities of those authorities.
6. Where the importing Party denies entry into its territory of a good of the other Party because it does not comply with an animal or plant health measure, the importing Party shall, upon request, provide a written explanation to the exporting Party, identifying the relevant measure as well as the reasons why the good does not comply with that measure.
Article 4-18. Information Centers.
1. Each Party shall ensure that there is an information center capable of responding to all reasonable inquiries from the other Party and interested persons, as well as providing relevant documentation regarding:
(a) any animal or plant health measures of general application, including control or inspection or approval procedures, proposed, adopted or maintained in its territory by any government, whether central or federal;
(b) the Party's risk assessment processes and the factors it takes into consideration in conducting the assessment and in establishing its appropriate level of protection;
(c) the Party's membership and participation in international and regional animal and plant health and phytosanitary bodies and systems, and bilateral and multilateral agreements within the scope of this section, and in relation to the provisions of those bodies, systems or agreements; and
(d) the location of notices published pursuant to this section or the place where the information contained therein may be obtained.
2. Each Party shall ensure that, where copies of documents are requested by the other Party or interested persons, in accordance with the provisions of this Section, they shall be provided at the same price as for domestic sale, plus the cost of postage.
Article 4-19. Limitations on the Provision of Information.
Nothing in this Section shall be construed to require a Party to furnish any information the dissemination of which it considers likely to impede the enforcement of its laws, to be contrary to the public interest, or to prejudice the legitimate commercial interests of particular enterprises.
Article 4-20. Working Group on Animal and Plant Health Measures.
1. The Parties establish the Working Group on Animal and Phytosanitary Measures, composed of representatives of each Party with responsibilities in animal and phytosanitary matters.
2. The Working Group shall:
(a) shall seek, to the greatest extent possible, the assistance of relevant international standardizing organizations, in order to obtain available scientific and technical advice and to minimize duplication of effort in the exercise of its functions;
(b) may be assisted by experts and expert organizations as it deems appropriate;
(c) shall report annually to the Commission on the implementation of this section;
(d) shall meet, at the request of any Party, at least once a year, unless otherwise agreed by the Parties; and
(e) may establish working groups as it deems appropriate and determine their scope and mandate.
3. The Working Group shall facilitate:
(a) the improvement in food safety and animal and plant health conditions in the territory of the Parties;
(b) the activities of the Parties in accordance with articles 4-12 and 4-15;
(c) technical cooperation between the Parties, including cooperation in the development, application and enforcement of animal health or phytosanitary measures; and
(d) consultations on specific animal or phytosanitary matters.
Article 4-21. Technical Consultations.
1. Each Party may request consultations with the other Party on any problem related to this Section.
2. Each Party may have recourse to relevant international standardizing organizations, including those referred to in paragraph 5 of Article 4-12, for advice and assistance on animal and plant health matters within their respective mandates.
3. Where a Party requests consultations concerning the application of this Section with respect to an animal or plant health measure of the other Party and so notifies the Working Group, the Working Group may facilitate consultations, if it does not consider the matter itself, by referring the matter to an ad-hoc working group or other forum for non-binding technical advice or recommendation.
4. The Working Group shall consider any matter referred to it pursuant to paragraph 3 as expeditiously as possible, particularly in relation to perishable goods, and shall forward to the Parties, in turn, any technical advice or recommendations it develops or receives in relation to that matter. The Parties shall send to the Working Group a written response regarding such technical advice or recommendation, within such time as the Working Group may direct.
5. Where, in accordance with paragraph 3, the Parties have had recourse to consultations facilitated by the Working Group, the consultations shall, if so agreed by the Parties, constitute consultations under Article 19- 04 (Consultations).
6. A Party asserting that an animal or plant health measure of the other Party is inconsistent with this Section shall have the burden of proving inconsistency.
Article 4-21. Technical Cooperation.
1. Each Party shall, upon request of the other Party:
(a) facilitate the provision of technical advice, information and assistance, on mutually agreed terms and conditions, to strengthen its animal and plant health measures and related activities, including research, process technology, infrastructure and the establishment of domestic regulatory bodies. Such assistance may include credits, grants and funds for the acquisition of technical skills, training and equipment to facilitate adjustment and compliance with an animal or plant health measure of the other Party;
(b) provide information on its technical cooperation programs relating to animal or plant health measures in areas of particular interest; and
(c) consult with the other Party during the development of any animal or plant health measure, or prior to a change in its application.
Chapter V. Rules of Origin
Article 5-01. Definitions.
For the purposes of this chapter, the following definitions shall apply:
good: any merchandise, product, article or matter;
fungible goods: goods that are interchangeable for commercial purposes, whose properties are essentially identical and that it is not practical to differentiate them by simple visual examination;
identical or similar goods: "identical goods" and "similar goods" respectively, as defined in the Customs Valuation Code;
originating good or originating material: a good or material that qualifies as originating in accordance with the provisions of this chapter;
goods wholly obtained or produced entirely in the territory of one or both Parties:
(a) minerals extracted in the territory of one or both Parties;
(b) plants harvested in the territory of one or both of the Parties;
(c) live animals, born and raised in the territory of one or both Parties;
(d) goods obtained from hunting or fishing in the territory of one or both Parties;
(e) fish, crustaceans and other marine species obtained by vessels registered or recorded by a Party and flying the flag of that Party;
(f) goods produced on board factory ships from the goods identified in subparagraph e), provided that such factory ships are registered or recorded by a Party and are flying the flag of that Party;
(g) goods obtained by a Party or a person of a Party from the seabed or subsoil outside the territorial waters, provided that the Party has rights to exploit that seabed or subsoil;
(h) wastes and residues derived from:
(i) production in the territory of one or both Parties;
(ii) goods used or collected in the territory of one or both Parties, provided that such goods serve only for the recovery of raw materials; or
(iii) goods produced in the territory of one or both Parties exclusively from the goods referred to in subparagraphs a) through h) or their derivatives, at any stage of production;
containers and packing materials for shipment: goods that are used to protect a good during transportation, other than containers and materials for retail sale;
shipping and repacking costs: costs incurred in repacking and transporting a good outside the territory where the producer or exporter of the good is located;
cost of sales promotion, marketing and after-sales services: the following costs related to sales promotion, marketing and after-sales services:
(a) sales promotion and marketing; media advertising; advertising and market research; promotional and demonstration materials; exhibited goods; sales promotion conferences, trade shows and conventions; banners; marketing exhibitions; free samples; sales, marketing and after-sales service publications such as goods brochures, catalogs, technical publications, price lists, service manuals and sales support information; establishment and protection of logos and trademarks; sponsorships; restocking charges for wholesale and retail sales; representation expenses;
(b) sales and marketing incentives; wholesale, retail and consumer rebates and rebates on goods;
(c) for sales promotion, marketing and after-sales service personnel: salaries and wages, sales commissions, bonuses; medical, insurance and pension benefits; travel, lodging and living expenses, and membership and professional fees;
(d) hiring and training of sales promotion, marketing and after-sales service personnel, and training of the client's employees after the sale;
(e) insurance for civil liability derived from the property;
(f) office equipment for sales promotion, marketing and after-sales services;
(g) telephone, mail and other means of communication, for sales promotion, marketing and after-sales services;
(h) rents and depreciation of offices for sales promotion, marketing and after-sales services, as well as distribution centers;
(i) property insurance premiums, taxes, cost of utilities, and costs of repair and maintenance of offices and distribution centers; and
(j) payments by the producer to others for warranty repairs;
net cost: total cost less sales promotion, marketing and after-sales service costs, royalties, shipping and repackaging, as well as ineligible interest costs, as set forth in the annex to this article;
ineligible interest costs: interest paid by a producer on its financial obligations that exceeds 10 percentage points above the highest rate of interest on debt obligations issued by the central or federal government, as the case may be, the Party in which the producer is located, as set forth in the Annex to this Article;
total cost: the sum of the following elements in accordance with the provisions of the annex to this article:
(a) the cost or value of direct manufacturing materials used in the production of the good;
(b) the cost of the direct labor used in the production of the good; and
(c) an amount for direct and indirect costs and expenses of manufacturing the good, reasonably allocated to the good, except for the following items:
(i) the costs and expenses of a service provided by the producer of a good to another person, when the service does not relate to the good;
(ii) costs and losses resulting from the sale of a part of the producer's business, which constitutes a discontinued operation;
(iii) costs related to the cumulative effect of changes in the application of accounting principles;
(iv) costs or losses resulting from the sale of a capital asset of the producer;
(v) costs and expenses related to acts of God or force majeure; or
(vi) profits earned by the producer of the good, whether retained by the producer or paid to others as dividends, and taxes paid on those profits, including capital gains taxes;
direct manufacturing costs and expenses: those incurred in a period, directly related to the good, other than the cost or value of direct materials and direct labor costs;
indirect manufacturing costs and expenses: those incurred in a period, other than direct manufacturing costs and expenses, direct labor costs and cost or value of direct materials;
F.O.B.: free on board (F.O.B.);
place where the producer is located: in relation to a good, the production plant of that good;
material: a good used in the production of another good;
self-produced material: a material produced by the producer of a good and used in the production of that good;
fungible materials: materials that are interchangeable for commercial purposes and whose properties are essentially identical;
indirect material: a good used in the production, testing or inspection of a good, but not physically incorporated in the good; or a good that is used in the maintenance of buildings or operation of equipment related to the production of a good, including:
(a) fuel and power;
(b) tools, dies and molds;
(c) spare or replacement parts and materials used in the maintenance of equipment and buildings;
(d) lubricants, greases, composites and other materials used in the production or operation of equipment or buildings;
(e) gloves, goggles, footwear, clothing, safety equipment and attachments;
(f) equipment, apparatus and attachments used for the verification or inspection of the goods;
(g) catalysts and solvents; or
(h) any other goods that are not incorporated in the good, but whose use in the production of the good can be reasonably demonstrated to be part of that production;
intermediate material: self-manufactured materials used in the production of a good, and designated in accordance with Article 5-07;
related person: a person who is related to another person, as follows:
(a) one of them holds positions of responsibility or management in an enterprise of the other;
(b) they are legally recognized as associated in business;
(c) they are in the relationship of employer and employee;
(d) a person has, directly or indirectly, ownership, control or possession of 25% or more of the outstanding and voting shares or securities of both;
(e) one of them directly or indirectly controls the other;
(f) both persons are directly or indirectly controlled by a third person;
(g) together they directly or indirectly control a third person; or
(h) are members of the same family (children, siblings, grandparents or spouses);
generally accepted accounting principles: the consensus recognized to the substantial support authorized in the territory of a Party, with respect to the recording of revenues, expenses, costs, assets and liabilities, disclosure of information and preparation of financial statements. These standards may be broad guidelines of general application, as well as detailed practical rules and procedures;
production: the growing, extracting, harvesting, fishing, hunting, manufacturing, processing or assembling of a good;
producer: a person who grows, extracts, harvests, fishes, hunts, manufactures, processes or assembles a good;
royalties: payments that relate to intellectual property rights; used: employed or consumed in the production of goods;
transaction value of a good: the price actually paid or payable for a good related to the transaction of the producer of the good in accordance with the principles of Article 1 of the Customs Valuation Code, adjusted in accordance with the principles of Article 8.1, 8.3 and 8.4 thereof, without regard to whether the good is sold for export. For the purposes of this definition, the seller referred to in the Customs Valuation Code shall be the producer of the good;
transaction value of a material: the price actually paid or payable for a transaction-related material by the producer of the good in accordance with the principles of Article 1 of the Customs Valuation Code, adjusted in accordance with the principles of Article 8.1, 8.3 and 8.4 thereof, without regard to whether the material is sold for export. For the purposes of this definition, the seller referred to in the Customs Valuation Code shall be the supplier of the material, and the buyer referred to in the Customs Valuation Code shall be the producer of the good.
Article 5-02. Instruments of Application.
For the purposes of this chapter:
(a) the basis for tariff classification is the Harmonized System;
(b) the determination of the transaction value of a good or material shall be made in accordance with the principles of the Customs Valuation Code; and
(c) all costs referred to in this Chapter shall be recorded and maintained in accordance with generally accepted accounting principles applicable in the territory of the Party where the good is produced.
Article 5-03. Originating Goods.
A good shall be originating in the territory of a Party when:
(a) it is wholly obtained or produced entirely in the territory of one or both Parties, as defined in Article 5-01;
(b) it is produced in the territory of one or both of the Parties exclusively from materials that qualify as originating under this Chapter;
(c) is produced in the territory of one or both of the Parties from non-originating materials that meet a change in tariff classification and other requirements, as specified in the Annex to this Article, and the good complies with the other applicable provisions of this Chapter;
(d) is produced in the territory of one or both of the Parties from non-originating materials that comply with a change in tariff classification and other requirements, and the good complies with a regional value content requirement, as specified in the Annex to this Article, and with the other applicable provisions of this Chapter;
(e) is produced in the territory of one or both of the Parties and complies with a regional value content requirement, as specified in the Annex to this Article, and complies with the other applicable provisions of this Chapter; or
(f) except for goods covered by Chapters 61 through 63 of the Harmonized System, the good is produced in the territory of one or both of the Parties, but one or more of the non-originating materials used in the production of the good does not comply with a change in tariff classification because:
(i) the good has been imported into the territory of a Party unassembled or disassembled, but has been classified as an assembled good in accordance with General Rule 2(a) of the Harmonized System; or
(ii) the heading for the good is the same for both the good and its parts and that heading is not divided into subheadings or the subheading is the same for both the good and its parts;
provided that the regional value content of the good, determined in accordance with Article 5-04, is not less than 50%, except as otherwise provided in Articles 5-15 or 5-20, when the transaction value method is used or 41.66% when the net cost method is used, and the good complies with the other applicable provisions of this Chapter.
2. For purposes of this Chapter, the production of a good from non-originating materials that meet a change in tariff classification and other requirements, as specified in the Annex to this Article, shall be made entirely in the territory of one or both Parties, and any regional value content requirement of a good shall be satisfied entirely in the territory of one or both Parties.
Article 5-04. Regional Value Content.
1. Except as provided in paragraph 5, each Party shall provide that the regional value content of a good shall be calculated, at the option of the exporter or producer of the good, in accordance with the transaction value method provided in paragraph 2, or the net cost method provided in paragraph 4.
2. In order to calculate the regional value content of a good based on the transaction value method, the following formula shall be applied:
RCV = VT - VMN / VT x 100
where
RCV: regional content value expressed as a percentage.
VT: transaction value of a good adjusted on an F.O.B. basis, except as provided in paragraph 3.
VMN: value of non-originating materials used by the producer in the production of the good determined in accordance with the provisions of Article 5-05.
3. For purposes of paragraph 2, where the good is not exported directly by the producer of the good, the transaction value shall be adjusted to the point at which the good is received by the purchaser within the territory where the producer is located.
4. To calculate the regional value content of a good based on the net cost method, the following formula shall be applied:
RCV = NC-VMN / CN x 100
where
RCV: regional content value expressed as a percentage.
NC: net cost of the good.
VMN: value of non-originating materials used by the producer in the production of the good determined in accordance with the provisions of Article 5-05.
5. Each Party shall provide that an exporter or producer shall calculate the regional value content of a good solely on the basis of the net cost method set out in paragraph 4 where: