(ii) the information provided by the customs authority of the exporting Party is inadequate to confirm that the product has originating status.
2. The customs authority of the importing Party may deny preferential tariff treatment to a product for which an importer claims preferential tariff treatment if the importer fails to comply with requirements of this Chapter other than those relating to the originating status of the products.
3. If the customs authority of the importing Party has sufficient justification to deny preferential tariff treatment under paragraph 1 of this Article, in cases where the customs authority of the exporting Party has provided an opinion on the originating status of the product referred to in point (b) of Article 3.24(5) (Administrative cooperation) confirming the originating status of the products, the customs authority of the importing Party shall notify the customs authority of the exporting Party of its reasons and intention to deny the preferential tariff treatment within two months after the date of receipt of that opinion.
4. If the notification as referred to in paragraph 3 has been made, consultations shall be held at the request of either Party, within three months after the date of such notification. The period for consultations may be extended on a case-by-case basis by mutual agreement between the customs authorities of the Parties. The consultations shall take place in accordance with the procedure set by the Joint Customs Cooperation Committee, unless otherwise agreed between the customs authorities of the Parties.
5. Upon expiry of the period for consultations, where the customs authority of the importing Party cannot confirm that the product is originating, it may deny the preferential tariff treatment if it has sufficient justification for doing so and after having granted the importer the right to be heard. However, when the customs authority of the exporting Party confirms the originating status of the products and provides justification for such confirmation, the customs authority of the importing Party shall not deny preferential tariff treatment to a product on the sole ground that Article 3.24(6) (Administrative cooperation) has been applied.
6. Within two months after the date of its final decision on the originating status of the product, the customs authority of the importing Party shall notify the customs authority of the exporting Party that provided an opinion on the originating status of the product referred to in point (b) of Article 3.24(5) (Administrative cooperation) of that final decision.
Article 3.26. Confidentiality
1. Each Party shall maintain, in accordance with its law, the confidentiality of information provided by the other Party or a person of that Party, pursuant to this Chapter, and shall protect that information from disclosure.
2. Information obtained by the authorities of the importing Party may only be used for the purposes of this Chapter. A Party may use information collected pursuant to this Chapter in any administrative, judicial, or quasi-judicial proceedings instituted for failure to comply with the requirements set out in this Chapter. A Party shall notify the other Party or a person of that Party who provided the information in advance of such use.
3. Each Party shall ensure that confidential information collected pursuant to this Chapter shall not be used for purposes other than the administration and enforcement of decisions and determinations relating to origin and to customs matters, except with the permission of the other Party or a person of that Party who provided such confidential information. If confidential information is requested for judicial proceedings not relating to origin and customs matters in order to comply with the law of a Party, and provided that Party notifies the other Party or a person of that Party who provided the information in advance and states the legal requirement for such use, permission of the other Party or a person of that Party who provided the confidential information shall not be required.
Article 3.27. Administrative Measures and Sanctions
Each Party shall ensure the effective enforcement of this Chapter. Each Party shall ensure that its competent authorities are able, in accordance with its law, to impose administrative measures and, where appropriate, sanctions for violations of the obligations under this Chapter.
Section C. FINAL PROVISIONS
Article 3.28. Ceuta and Melilla
1. For the purposes of this Chapter, the term "Party" does not include Ceuta and Melilla.
2. Products originating in New Zealand, when imported into Ceuta and Melilla, shall in all respects be subject to the same customs regime, including preferential tariff treatment, as that which is applied to products originating in the customs territory of the Union under Protocol 2 concerning the Canary Islands and Ceuta and Melilla of the 1985 Act of Accession (1). New Zealand shall apply to imports of products covered by this Agreement and originating in Ceuta and Melilla the same customs regime, including preferential tariff treatment, as that which is applied to products imported from and originating in the Union.
3. The rules of origin and origin procedures applicable to New Zealand under this Chapter shall apply in determining the origin of products exported from New Zealand to Ceuta and Melilla. The tules of origin and origin procedures applicable to the Union under this Chapter shall apply in determining the origin of products exported from Ceuta and Melilla to New Zealand.
4. Ceuta and Melilla shall be considered as a single territory.
5. The Spanish customs authorities shall be responsible for the application of this Chapter in Ceuta and Melilla.
Article 3.29. Transitional Provisions for Products In Transit or Storage
This Agreement may be applied to products that comply with this Chapter and, on the date of entry into force of this Agreement, are either in transit from the exporting Party to the importing Party or under customs control in the importing Party without payment of import duties and taxes, subject to the making of a claim for preferential tariff treatment referred to in Article 3.16 (Claim for preferential tariff treatment) to the customs authority of the importing Party within 12 months after the date of entry into force of this Agreement.
Article 3.30. Joint Customs Cooperation Committee
1. This Article complements and further specifies Article 24.4 (Specialised committees).
2. The Joint Customs Cooperation Committee established under the CCMAA shall, with respect to this Chapter, have the following functions:
(a) considering possible amendments to this Chapter, including those arising from the review of the Harmonized System;
(b) adopting, by decisions, explanatory notes to facilitate the implementation of this Chapter; and
(c) adopt a decision to establish the procedure for consultations referred to in Article 3.25(4) (Denial of preferential tariff treatment).
Chapter 4. CUSTOMS AND TRADE FACILITATION
Article 4.1. Objectives
The objectives of this Chapter are to:
(a) promote trade facilitation for goods traded between the Parties while ensuring effective customs controls, taking into account the evolution of trade practices;
(b) ensure transparency of each Party's laws and regulations relating to the requirements for the import, export and transit of goods and consistency thereof with applicable international standards;
(c) ensure predictable, consistent and non-discriminatory application by each Party of its customs laws and regulations relating to the requirements for the import, export and transit of goods;
(d) promote simplification and modernisation of customs procedures and practices of each Party;
(e) further develop risk management techniques to facilitate legitimate trade while securing the international trade supply chain; and
(f) enhance cooperation between the Parties in the field of customs matters and trade facilitation.
Article 4.2. Customs Cooperation and Mutual Administrative Assistance
1. The competent authorities of the Parties shall cooperate on customs matters in order to ensure that the objectives set out in Article 4.1 (Objectives) are attained.
2. In addition to the CCMAA, the Parties shall develop cooperation, including in the following areas:
(a) exchanging information concerning customs laws and regulations, their implementation, and customs procedures, particularly in the following areas:
(i) the enforcement of intellectual property rights by the customs authorities;
(ii) the facilitation of transit movements and transhipment; and
(iii) relations with the business community;
(b) strengthening their cooperation in the field of customs in international organisations such as the WTO and the WCO;
(c) endeavouring to harmonise their data requirements for import, export and other customs procedures by implementing common standards and data elements in accordance with the WCO Data Model;
(d) exchanging, where relevant and appropriate, through a structured and recurrent communication between customs authorities of the Parties, certain categories of customs- related information for the purpose of improving risk management and the effectiveness of customs controls, targeting high-risk goods and facilitating legitimate trade. Exchanges under this point shall be without prejudice to exchanges of information that may take place between the Parties pursuant to the provisions of the CCMAA on mutual administrative assistance;
(e) strengthening their cooperation on risk management techniques, including sharing best ptactices, and where appropriate, risk information and control results; and
(f) establishing, where relevant and appropriate, mutual recognition of authorised economic operator programmes and customs controls, including equivalent trade facilitation measures.
3. Without prejudice to other forms of cooperation envisaged under this Agreement, the customs authorities of the Parties shall cooperate, including through exchange of information, and provide each other with mutual administrative assistance in the matters covered by this Chapter in accordance with the provisions of the CCMAA. Any exchange of information between the Parties under this Chapter shall be mutatis mutandis subject to the confidentiality and protection of information requirements set out in Article 17 CCMAA as well as any confidentiality and privacy requirements to be agreed by the Parties.
Article 4.3. Customs Provisions and Procedures
1. Each Party shall ensure that its customs provisions and procedures are based on:
(a) the international instruments and standards applicable in the area of customs and trade which each Party has accepted, including the substantive elements of the International Convention on the Simplification and Harmonisation of Customs Procedures, done at Kyoto on 18 May 1973, as amended, (Revised Kyoto Convention), the International Convention on the Harmonized Commodity Description and Coding System, done at Brussels on 14 June 1983, as well as the Framework of Standards to Secure and Facilitate Global Trade and the WCO Data Model;
(b) the protection and facilitation of legitimate trade through effective enforcement and compliance with the applicable requirements provided under its law;
(c) customs laws and regulations that are proportionate and non-discriminatory, avoiding unnecessary burdens on economic operators, providing for further facilitation for operators ensuring high levels of compliance, including favourable treatment with respect to customs controls prior to the release of goods, and ensuring safeguards against fraud and illicit or damageable activities; and
(d) rules that ensure that any penalty imposed for breaches of customs laws and regulations is proportionate and non-discriminatory and that the imposition of such penalties does not unduly delay the release of the goods.
2. Each Party should periodically review its customs laws, regulations and procedures. Customs procedures shall also be applied in a manner that is predictable, consistent and transparent.
3. In order to improve working methods, as well as to ensure non-discrimination, transparency, efficiency, integrity and accountability of operations, each Party shall:
(a) simplify and review requirements and formalities wherever possible with a view to ensuring the rapid release and clearance of goods; and
(b) work towards further simplification and standardisation of data and documentation required by customs authorities and other agencies.
Article 4.4. Release of Goods
1. Each Party shall adopt or maintain customs procedures that:
(a) provide for the prompt release of goods within a period that is no longer than necessary to ensure compliance with its laws and regulations and, to the extent possible, upon arrival of the goods;
(b) provide for advance electronic submission and processing of documentation and any other required information prior to the arrival of the goods, to enable the release of goods upon arrival;
(c) allow for the release of goods prior to the final determination of the applicable customs duties, taxes, fees and charges, if such a determination is not done prior to, or upon arrival, or as rapidly as possible after arrival and provided that all other regulatory requirements have been met. As a condition for such release, each Party may require a guarantee for any amount not yet determined in the form of a surety, a deposit or another appropriate instrument provided for in its laws and regulations. Such guarantee shall not be greater than the amount the Party requires to ensure payment of customs duties, taxes, fees and charges ultimately due for the goods covered by the guarantee. The guarantee shall be discharged when it is no longer required; and
(d) allow goods to be released at the point of arrival, without temporary transfer to warehouses or other facilities, provided that the goods are otherwise eligible for release.
2. Each Party shall, to the extent possible, minimise the documentation required for the release of goods.
3. Each Party shall endeavour to allow for the expeditious release of goods in need of urgent clearance, including outside regular business hours of customs authorities and other relevant authorities.
4. Each Party shall, to the extent possible, adopt or maintain customs procedures that provide for expedited release of certain consignments while maintaining appropriate customs control, including allowing the submission of a single document covering all of the goods in the shipment, if possible, by electronic means.
Article 4.5. Perishable Goods
1. For the purposes of this Article, "perishable goods" are goods that rapidly decay due to their natural characteristics, in particular in the absence of appropriate storage conditions.
2. To prevent avoidable deterioration or loss of perishable goods, each Party shall give appropriate priority to perishable goods when scheduling and performing any examinations that may be required.
3. In addition to point (a) of Article 4.4(1) (Release of goods), and at the request of the economic operator, each Party shall, where practicable and in accordance with its laws and regulations:
(a) provide for the clearance of a consignment of perishable goods outside regular business hours of customs authorities and other relevant authorities; and
(b) allow consignments of perishable goods to be moved to and cleared at the premises of the economic operator.
Article 4.6. Simplified Customs Procedures
Each Party shall adopt or maintain measures allowing traders or operators fulfilling criteria specified in its laws and regulations to benefit from further simplification of customs procedures. Such measures may include:
(a) customs declarations containing a reduced set of data or supporting documents; or
(b) periodical customs declarations for the determination and payment of customs duties and taxes covering multiple imports within a given period, after the release of those imported goods.
Article 4.7. Transit and Transhipment
1. Each Party shall ensure the facilitation and effective control of transhipment operations and transit movements through its respective territory.
2. Each Party shall ensure cooperation and coordination between all authorities and agencies concerned in its respective territory to facilitate traffic in transit.
3. Provided all regulatory requirements are met, each Party shall allow goods intended for import to be moved within its territory under customs control from a customs office of entry to another customs office in its territory from where the goods would be released or cleared.
Article 4.8. Risk Management
1. Each Party shall adopt or maintain a risk management system for customs control.
2. Each Party shall design and apply risk management in a manner as to avoid arbitrary or unjustifiable discrimination, or disguised restrictions to international trade.
3. Each Party shall concentrate customs control and other relevant border controls on high-risk consignments and shall expedite the release of low-risk consignments. Each Party may also select consignments for such controls on a random basis as part of its risk management.
4. Each Party shall base risk management on assessment of risk through appropriate selectivity criteria.
Article 4.9. Post-clearance Audit
1. With a view to expediting the release of goods, each Party shall adopt or maintain post-clearance audits to ensure compliance with customs and other related laws and regulations.
2. Each Party shall select a person or a consignment for a post-clearance audit in a risk-based manner, which may include appropriate selectivity criteria. Each Party shall conduct a post-clearance audit in a transparent manner. Where a person is involved in the audit process and conclusive results have been achieved, the Party shall, without delay, notify the person whose record is audited of the results, the person's rights and obligations and the reasons for the results.
3. The information obtained in a post-clearance audit may be used in further administrative or judicial proceedings.
4. The Parties shall, wherever practicable, use the result of a post-clearance audit in applying risk management.
Article 4.10. Authorised Economic Operators
1. Each Party shall establish or maintain a partnership programme for operators who meet specified criteria (hereinafter referred to as "authorised economic operators").
2. The specified criteria to qualify as an authorised economic operator shall be published and they shall relate to compliance with requirements specified in the respective laws and regulations or procedures of the Parties. Such criteria may include:
(a) an appropriate record of compliance with customs and other related laws and regulations;
(b) asystem of managing records to allow for necessary internal controls;
(c) financial solvency, including, where appropriate, provision of a sufficient security or guarantee; and
(d) supply chain security.
3. The specified criteria to qualify as an authorised economic operator shall not be designed or applied so as to afford or create arbitrary or unjustifiable discrimination between operators where the same conditions prevail and shall allow the participation of SMEs.
4. The authorised economic operator programme shall include specific benefits for an authorised economic operator, such as:
(a) low rate of physical inspections and examinations as appropriate;
(b) priority treatment if selected for control;
(c) rapid release time as appropriate;
(d) deferred payment of customs duties, taxes, fees and charges;
(e) use of comprehensive guarantees or reduced guarantees;
(f) asingle customs declaration for all imports or exports in a given period; and
(g) clearance of goods at the premises of the authorised economic operator or another place authorised by the customs authorities.
5. Notwithstanding paragraphs 1 to 4, a Party may offer the exemplary benefits listed in paragraph 4 through customs procedures generally available to all operators, in which case that Party is not required to establish a separate scheme for authorised economic operators.
6. The Parties may foster cooperation between customs authorities and other government authorities or agencies within a Party in relation to authorised economic operator programmes. Such cooperation may be achieved, inter alia, by aligning requirements, facilitating access to benefits and minimising unnecessary duplication.
Article 4.11. Publication and Availability of Information
1. Each Party shall promptly publish, in a non-discriminatory and easily accessible manner and as far as possible through the internet, laws, regulations and customs procedures, relating to the requirements for the import, export and transit of goods. This shall include:
(a) importation, exportation and transit procedures, including port, airport, and other entry-point procedures, and required forms and documents;
(b) applied rates of duties and taxes of any kind imposed on or in connection with importation or exportation;
(c) fees and charges imposed by or for governmental agencies on or in connection with importation, exportation or transit;
(d) rules for the classification or valuation of products for customs purposes;
(e) laws, regulations and administrative rulings of general application relating to rules of origin;
(f) import, export or transit restrictions or prohibitions;
(g) penalty provisions against breaches of import, export or transit formalities;
(h) appeal procedures;
(i) agreements or parts thereof with any country or countries relating to importation, exportation or transit;
(j) procedures relating to the administration of tariff quotas;
(k) hours of operation for customs offices; and
(l) relevant notices of an administrative nature.
2. Each Party shall endeavour to make public new laws, regulations and customs procedures, relating to the requirements for the import, export and transit of goods prior to their application, as well as changes to and interpretations thereof.
3. Each Party shall, to the extent possible, ensure there is a reasonable time period between the publication of amended or new laws, regulations and customs procedures, fees or charges and their entry into force.
4. Each Party shall make available, and update as appropriate, the following through the internet:
(a) a description of its importation, exportation and transit procedures, including appeal procedures, informing of the practical steps needed for the import and export, and for transit;
(b) the forms and documents required for importation into, exportation from, or transit through the territory of the Party; and
(c) contact information of enquiry points.
5. Each Party shall, subject to its available resources, establish or maintain enquiry points to answer within a reasonable time enquiries of governments, traders and other interested parties on matters covered by paragraph 1. A Party shall not require the payment of a fee for answering enquiries from the other Party.
Article 4.12. Advance Rulings
1. The customs authority of each Party shall issue advance rulings to an applicant setting out the treatment to be accorded to the goods concerned, in accordance with its laws and regulations. Such rulings shall be issued in writing or in electronic format in a time-bound manner and shall contain all necessary information. Each Party shall ensure that an advance ruling can be issued to, and used in the Party by, an applicant of the other Party.
2. Advance rulings shall be issued with regard to:
(a) the tariff classification of goods;
(b) the origin of goods; and
(c) the appropriate method or criteria, and the application thereof, to be used for determining the customs value under a particular set of facts, if permitted by the laws and regulations of a Party.
3. Advance rulings shall be valid for a period of at least three years from the date of their issuance or some other date if specified in the ruling. The issuing Party may modify or revoke, invalidate or annul an advance ruling if the ruling was based on incorrect, incomplete, false or misleading information, an administrative error or if there is a change in the law, the material facts or the circumstances on which the ruling is based.
4. A Party may refuse to issue an advance ruling if the question raised in the application is the subject of an administrative or judicial review, or if the application does not relate to any intended use of the advance ruling or any intended use of a customs procedure. If a Party declines to issue an advance ruling, that Party shall promptly notify the applicant in writing, setting out the relevant facts and the basis for its decision.
5. Each Party shall publish, at least:
(a) the requirements for the application for an advance ruling, including the information to be provided and the format;
(b) the time period by which it will issue an advance ruling; and
(c) the length of time for which the advance ruling is valid.
6. If a Party modifies, revokes, invalidates or annuls an advance ruling, it shall provide written notice to the applicant setting out the relevant facts and the basis for its decision. A Party may only modify, revoke, invalidate or annul an advance ruling with retroactive effect if the advance ruling was based on incomplete, incorrect, false or misleading information.
7. An advance ruling issued by a Party shall be binding on that Party in respect of the applicant that sought it. The Party may provide that the advance ruling be binding on the applicant.
8. Each Party shall provide, upon written request from the applicant, a review of an advance ruling or of a decision to amend, revoke or invalidate the advance ruling.
9. Each Party shall endeavour to make publicly available information on advance rulings, taking into account the need to protect personal and commercially confidential information.
10. Each Party shall issue an advance ruling without delay, and normally within 150 days after the date of receipt of all necessary information. This period may be extended, in accordance with the laws and regulations of a Party, if additional time is needed to ensure that the advance rulings are issued in a correct and uniform manner. In that event, the Party shall inform the applicant of the reason for, and the duration of, the extension.