11. Neither Party shall apply an import licensing procedure to a good of the other Party unless it has, with respect to that procedure, met the requirements of paragraph 3 or 6, as applicable.
Article 2.11. Customs Valuation
The Parties shall determine the customs value of goods traded between them in accordance with the provisions of Article VII of the GATT 1994 and the Customs Valuation Agreement, mutatis mutandis.
Article 2.12. Elimination of Export Subsidies
Neither Party shall adopt or maintain any export subsidy on any good destined for the territory of the other Party.
Article 2.13. Goods In Transit
Each Party shall continue to facilitate customs clearance of goods in transit from or to other Party in accordance with paragraph 3 of Article V of GATT 1994 and the relevant provisions of the Trade Facilitation Agreement.
Article 2.14. Transparency
Article X of the GATT 1994 is incorporated into and made a part of this Agreement, mutatis mutandis
Article 2.15. 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 made a part of this Agreement, mutatis mutandis.
Article 2.16. Administrative Fees and Formalities
1. Each Party shall ensure, in accordance with paragraph 1 of Article VIII of GATT 1994 and its interpretive notes and Article 6 of the Trade Facilitation Agreement, that all fees and charges of whatever character (other than import or export duties, charges equivalent to an internal tax or other internal charge applied consistently with paragraph 2 of Article III of GATT 1994, and anti-dumping and countervailing duties applied pursuant to a Party’s law) imposed on, or in connection with, importation or exportation are limited in amount to the approximate cost of services rendered and do not represent an indirect protection to domestic goods or a taxation of imports or exports for fiscal purposes.
2. Each Party shall promptly make information available on the internet regarding the fees and charges it imposes in connection with importation or exportation.
Article 2.17. Non-Tariff Measures
1. A Party shall not adopt or maintain any non-tariff measure on the importation of any good of the other Party or on the exportation of any good 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 the transparency of its non-tariff measures permitted under paragraph 1 and shall ensure that any such measures are not prepared, adopted, or applied with the view to, or with the effect of, creating unnecessary obstacles to trade with the other Party.
3. Each Party shall ensure that its laws, regulations, procedures, and administrative rulings relating to non-tariff measures are promptly published, including on the internet where feasible, or otherwise made available in such a manner as to enable the other Party to become acquainted with them.
4. A Party may request technical consultations in writing with the other Party on a non-tariff measure that the requesting Party considers to be adversely affecting its trade. The request shall clearly identify the measure and the concerns as to how the measure adversely affects trade between the Parties. Technical consultations may be conducted via any means mutually agreed by the Parties.
5. If a Party considers that a non-tariff measure of the other Party is an unnecessary obstacle to trade, that Party may nominate such a non tariff measure for review by the Committee on Trade in Goods by notifying the other Party at least 30 days before the date of the next scheduled meeting of the Committee. A nomination of a non-tariff measure for review shall include reasons for its nomination and, if possible, suggested solutions. The 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 Committee on Trade in Goods is without prejudice to the Parties rights under Chapter 16 (Dispute Settlement).
Article 2.18. 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.
Article 2.19. Exchange of Data
1. The Parties recognise the value of trade data to accurately analyse the implementation of this Agreement. The Parties shall cooperate with a view to conducting periodic exchanges of data relating to trade in goods between the Parties.
2. The Parties may engage in such periodic exchanges within the Committee on Trade in Goods pursuant to Article 2.20 (Committee on Trade in Goods) for such purposes or any purposes as the Joint Committee may determine.
3. A Party shall give positive consideration to a request from the other Party for technical assistance for the purposes of the exchange of data under paragraph 1.
Article 2.20. Committee on Trade In Goods
1. The Parties hereby establish a Committee on Trade in Goods under the Joint Committee, which shall comprise of representatives of each Party.
2. The Committee shall meet once a year or as often as the Parties consider necessary to consider any matters arising under this Chapter.
3. The Committee shall establish a contact point for each Party at a senior level to facilitate communication between the Parties, including to encourage consultation, as early as practicable, on any matter relating to this Chapter.
4. The Committee’s functions shall include, inter alia: (a) reviewing and monitoring the implementation of this Chapter;
(b) promoting trade in goods between the Parties, including consultations on accelerating or improving tariff commitments 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, where appropriate, referring any matters to the Joint Committee for consideration;
(d) endorsing the transposition of the schedules of tariff commitments in Annex 2A (Schedules of Tariff Commitments) in accordance with Article 2.6 (Classification of Goods and Transposition of Schedules of Tariff Commitments), and consulting to resolve any conflicts; and
(e) discussing any other matter arising under this Chapter as mutually agreed by the Parties.
Chapter 3. RULES OF ORIGIN
Section A. RULES OF ORIGIN
Article 3.1. Definitions
For the purposes of this Chapter:
(a) aquaculture means the farming of aquatic organisms including fish, molluscs, crustaceans, other aquatic invertebrates, and aquatic plants, from seedstock such as eggs, fry, fingerlings, and larvae, by intervention in the rearing or growth processes to enhance production, such as regular stocking, feeding, or protection from predators;
(b) CIF value means the value of the imported good, inclusive of the cost of insurance and freight up to the port or place of entry into the country of importation;
(c) competent authority means the government authority that, according to the laws and regulations of each Party, is responsible for issuing a certificate of origin or for the designation of certification entities or bodies:
(i) in the case of the UAE, the Ministry of Economy, or its successor; and
(ii) in the case of Indonesia, the Ministry of Trade, or its successor;
(d) exporter means a person located in the exporting Party who exports a good from the exporting Party in accordance with the applicable laws and regulations of the exporting Party;
(e) FOB value means the value of the good free on board, inclusive of the cost of transport (regardless of the mode of transport) to the port or site of final shipment abroad;
(f) generally accepted accounting principles means those principles recognized by consensus or with 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 principles may encompass broad guidelines of general application as well as detailed standards, practices, and procedures;
(g) identical and interchangeable materials means materials that are fungible as a result of being of the same kind and commercial quality, possessing the same technical and physical characteristics, and which once they are incorporated into the finished product cannot be distinguished from one another for origin purposes by virtue of any markings or mere visual examination;
(h) importer means a person who imports a good into the importing Party in accordance with the applicable laws and regulations of the importing Party;
(i) indirect material means any material used in the production, testing, or inspection of a good but not physically incorporated into it or the operation of equipment associated with the production of a good, including:
(i) fuel and energy;
(ii) tools, dies, and moulds;
(iii) spare parts and materials used in the maintenance of equipment;
(iv) lubricants, greases, compounding materials, and other materials used in production or used to operate equipment;
(v) gloves, glasses, footwear, clothing, and safety equipment;
(vi) equipment, devices, and supplies used for testing or inspecting the good;
(vii) catalysts and solvents; and
(viii) any other material that is not incorporated into the good but the use of which in the production of the good can reasonably be demonstrated to be a part of that production;
(j) material refers to any ingredient, raw material, component, or part, used in the production of a good;
(k) non-originating good or non-originating material means a good or material, which does not qualify as originating in accordance with this Chapter;
(l) producer means a person who engages in the production of goods; and
(m) production means methods of obtaining goods, including growing, mining, harvesting, farming, raising, breeding, extracting, gathering, collecting, capturing, fishing, aquaculture, trapping, hunting, manufacturing, processing, or assembling a good.
Article 3.2. Originating Goods
Except as otherwise provided in this Chapter, a good shall qualify as an originating good of a Party if the good is:
(a) wholly obtained or produced entirely in the territory of that Party as defined in Article 3.3 (Wholly Obtained or Produced Goods);
(b) not wholly obtained or produced entirely in the territory of that Party, provided that the good has satisfied the requirements of Article 3.4 (Not Wholly Obtained or Produced Goods); or
(c) produced entirely in the territory of that Party exclusively from originating materials,
and meets all other applicable requirements of this Chapter.
Article 3.3. Wholly Obtained or Produced Goods
For the purposes of this Chapter, the following goods shall be considered as wholly obtained or produced in the territory of a Party:
(a) plants and plant goods, including fruit, flowers, vegetables, trees, seaweed, fungi, and live plants, grown and harvested, picked, or gathered there;
(b) live animals born and raised there;
(c) goods obtained from live animals there;
(d) goods obtained by hunting, trapping, fishing, farming, aquaculture, gathering, or capturing conducted there;
(e) minerals and other naturally occurring substances, not included in subparagraphs (a) through (d), extracted or taken from its soil, waters, seabed, or subsoil beneath the seabed;
(f) goods of sea-fishing and other marine goods taken by vessels registered with the Party and entitled to fly its flag and other goods extracted or taken by the Party or a person of the Party, from the waters, seabed, or beneath the seabed in the continental shelf and the exclusive economic zone of that Party, provided that Party has the rights to exploit such waters, seabed, and beneath the seabed, in accordance with international law;
(g) goods of sea-fishing and other marine goods taken from the high seas in accordance with international law by any vessels registered with a Party and entitled to fly the flag of that Party;
(h) goods produced or made on board a factory ship from goods referred to in subparagraphs (f) and (g), provided such factory ship is registered with a Party and flying its flag;
(i) goods which are:
(i) waste and scrap resulting from production or consumption there, provided that such goods can no longer perform their original purpose nor are capable of being restored or repaired and are fit only for disposal, for the recovery of raw materials, or for recycling purposes; or
(ii) used articles collected there which can no longer perform their original purpose there nor are capable of being restored or repaired, and which are fit only for disposal or for the recovery of parts or raw materials; and
(j) goods obtained or produced there exclusively from goods referred to in subparagraphs (a) through (i), or from their derivatives, at any stage of production.
Article 3.4. Not Wholly Obtained or Produced Goods
1. For the purposes of subparagraph (b) of Article 3.2 (Originating Goods), a good shall be deemed to be originating if the good satisfies any of the following:
(a) a Change in Tariff Heading (hereinafter referred to as “CTH”), which means that all non-originating materials used in the production of the good have undergone a change in tariff classification at the four digit level;
(b) a Qualifying Value Content (hereinafter referred to as “QVC”) of not less than 40% of the FOB value; or
(c) a QVC of not less than 35% of the Ex-Works value.
2. Notwithstanding paragraph 1, a good shall be deemed to be originating if the good satisfies the Product Specific Rules (hereinafter referred to as “PSR”). The Parties agree to develop and implement the Annex on PSR within 12 months from the date of entry into force of this Agreement.
3. For the purposes of paragraph 1, the QVC shall be calculated as follows:
(a) FOB
QVC = FOB value - V.N.M / FOB value x100
or
(b) Ex-Works (EXW)
QVC = EXW value - V.N.M / EXW value x 100
where :
QVC is the qualifying value content of a good, expressed as a percentage;
FOB is the Free on Board value of the finished good;
EXW is the price paid for the good ex-works to the manufacturer in the 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; and
VNM is the CIF 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.
Article 3.5. Indirect Materials
Any indirect material used in the production of a good shall be treated as originating material irrespective of where such indirect material is originating.
Article 3.6. Non-Qualifying Operations
Notwithstanding any provisions in this Chapter, a good shall not be considered to be originating in the territory of a Party if only the following operations are undertaken exclusively by itself or in combination in the territory of that Party:
(a) operations to ensure the preservation of products in good condition during transport and storage such as drying, freezing, ventilation, chilling, and like operations;
(b) sifting, classifying, washing, cutting, slitting, bending, coiling or uncoiling, sharpening, simple grinding, or slicing;
(c) cleaning, including removal of oxide, oil, paint, or other coverings;
(d) painting and polishing operations;
(e) testing or calibration;
(f) placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards, and all other simple packaging operations;
(g) simple mixing (2) of goods, whether or not of different kinds;
(h) simple assembly (3) of parts of products to constitute a complete good or disassembly of products into parts;
(i) changes of packing, unpacking or repacking operations, and breaking up and assembly of consignments;
(j) affixing or printing marks, labels, logos and other like distinguishing signs on goods or their packaging;
(k) husking, partial or total bleaching, polishing, and glazing of cereals and rice; or
(l) mere dilution with water or another substance that does not materially alter the characteristics of the goods.
Article 3.7. Accumulation
1. 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.
2. Notwithstanding paragraph 1, an originating material from a Party that does not undergo processing beyond the minimal or non qualifying operations listed in Article 3.6 (Non-Qualifying Operations) in the other Party shall retain its originating status of the former Party.
Article 3.8. Intermediate Goods
For a non-originating material that undergoes sufficient production in the territory of one or both Parties as provided in Article 3.4 (Not Wholly Obtained or Produced Goods), the total value of the resulting good shall be the originating value when that good is used in the subsequent production of another good.
Article 3.9. De Minimis
1. A good that does not satisfy a change in tariff classification requirement as set out in PSR to be agreed pursuant to paragraph 2 of Article 3.4 (Not Wholly Obtained or Produced Goods) shall be considered as originating if:
(a) the value of all non-originating materials used in the production of the good that did not undergo the required change in tariff classification does not exceed 10 per cent of the FOB value of the good; or
(b) for a good provided for in Chapters 50 through 63 of the HS Code, the weight or value of all non-originating materials used in its production that did not undergo the required change in tariff classification does not exceed 10 per cent of the total weight or the FOB value of the good,
and the good meets all other applicable criteria set forth in this Chapter for qualifying as an originating good.
2. The value of non-originating materials referred to in paragraph 1, however, shall be included in the value of non-originating materials for any applicable QVC requirement for the good.
Article 3.10 . Identical and Interchangeable Materials
1. The determination of whether identical and interchangeable materials are originating shall be made either by physical segregation of each of the materials, or by the use of generally accepted accounting principle of stock control or inventory management practice applicable in the exporting Party.
2. The inventory management method used under paragraph 1 for particular identical and interchangeable materials shall continue to be used for that material throughout the fiscal year.
Article 3.11. Accessories, Spare Parts, and Tools
1. Accessories, spare parts, tools, and instructional or other information materials delivered with a good that form part of the good’s standard accessories, spare parts, tools, and instructional or other information materials shall be regarded as a part of the good, and shall be disregarded in determining whether or not all the non-originating materials used in the production of the originating goods undergo the applicable change in tariff classification provided that:
(a) the accessories, spare parts, tools, and instructional or other information materials are classified with and not invoiced separately from the good; and
(b) the quantities and value of the accessories, spare parts, tools, and instructional or other information materials presented with the good are customary for the good.
2. Notwithstanding paragraph 1, if the goods are subject to a QVC requirement, the value of the accessories, spare parts, tools, and instructional or other information materials shall be taken into account as originating or non-originating materials, as the case may be, in calculating the QVC of the goods.
Article 3.12. Treatment of Packages, Packing Materials, and Containers
1. If a good is subject to the QVC requirement, the value of the packages and packing materials for retail sale, shall be taken into account in determining the origin of such good as originating or non originating, as the case may be, provided that the packages and packing materials are considered to be forming a whole with the good.
2. If a good is subject to the change in tariff classification criterion, packages and packing materials for retail sale classified together with the packaged good according to the General Rules for the Interpretation of the Harmonised System, shall not be taken into account in determining the origin of such good.
3. Packing materials and containers used exclusively for the transportation of a good shall not be taken into account in determining the origin of such good.
Article 3.13. Consignment Criteria
1. An originating good shall be deemed as directly consigned from the exporting Party to the importing Party if:
(a) transported directly from the other Party; or
(b) transported for the purpose of transit through one or more intermediate non-Parties with or without transshipment or temporary storage in such non-Parties, provided that:
(i) the transit entry is justified for geographical reasons or by considerations related exclusively to transport requirements;
(ii) the good have not entered into trade or consumption there; and
(iii) the good have not undergone any operation there other than unloading and reloading or any operation required to keep them in good condition.
2. For the purposes of implementing paragraph 1 where transportation is effected through the territory of any non-Party, the customs authority of the importing Party may require importers who claim the preferential tariff treatment for the good to submit supporting documentation, such as: