2. Each Party shall ensure the transparency of its non-tariff measures permitted in paragraph 1 in accordance with Articles 19.2 (Publication) and 19.3 (Provision of Information) of Chapter 19 (Transparency) 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 in trade with the other Party. Any new measure or modification to an existing measure shall be duly notified to the other Party as soon as practicable, but in any event no later than the day the measure takes effect.
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.
Article 3.2. Mechanism on Non-Tariff Measures
1. 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.
2. Within 360 days of the date of entry into force of this Agreement, the Committee on Trade in Goods shall establish procedures for review of non-tariff measures nominated by either Party. Such review shall include consideration of the commercial significance of the trade impacted by the non-tariff measure, any progress achieved elsewhere, and whether less trade-restrictive alternatives exist. The Parties acknowledge that some non-tariff measures are imposed for legitimate reasons.
3. The Committee on Trade in Goods shall be supported in its review of non-tariff measures by the Sub-Committee on Sanitary and Phytosanitary Matters, Sub-Committee on Technical Barriers to Trade, Sub-Committee on Trade Facilitation and other relevant technical bodies, as appropriate, in accordance with this Agreement.
4. Once it has reviewed the non-tariff measures, the Committee on Trade in Goods shall provide advice to the Joint Committee on any non-tariff measures that should receive priority consideration by the Joint Committee and provide guidance, if possible, on solutions.
5. In accordance with Chapter 15 (Economic Cooperation), the Committee on Trade in Goods shall take into account opportunities relating to non-tariff measures, including capacity building and institutional strengthening programs in its recommendations on possible economic cooperation activities to the Committee on Economic Cooperation.
6. Under certain circumstances, each Party may establish a special contact point to liaise with relevant entities of the other Party in relation to specific non-tariff measures affecting trade between the Parties.
7. Chapter 20 (Consultations and Dispute Settlement) shall not apply to the mechanism under this Article. This Article shall not prejudice the rights of the Parties under Chapter 20 (Consultations and Dispute Settlement) regarding any other provision in this Agreement. This Article shall not affect the interpretation of any other provision in this Agreement.
Article 3.3. Quantitative Restrictions
Unless otherwise provided, neither Party shall adopt or maintain any prohibition or restriction 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. To this end, Article XI of GATT 1994 shall be incorporated into and made part of this Agreement mutatis mutandis.
Article 3.4. Import Licensing
1. Each Party shall ensure that all import licensing measures are implemented in a transparent and predictable manner, and applied in accordance with the Agreement on Import Licensing Procedures in Annex 1A to the WTO Agreement ("Import Licensing Agreement") (1).
2. After the date of entry into force of this Agreement, each Party shall promptly notify the other Party of existing import licensing procedures. Thereafter, each Party shall notify any new import licensing procedures and any modification to its existing import licensing procedures, to the extent possible 60 days before it takes effect, but in any case no later than the effective date of the licensing requirement. The information in any notification under this Article shall be in accordance with Articles 5.2 and 5.3 of the Import Licensing Agreement.
3. On request of the other Party, a Party shall respond to the request of that Party for information on import licensing requirements of general application within 60 days of receiving the request.
4. A Party shall be deemed to be in compliance with the obligations in paragraph 2 with respect to an import licensing procedure if:
(a) with respect to any new or modified import licensing procedure, it has notified that procedure to the WTO Committee on Import Licensing provided for in Article 4 of the Import Licensing Agreement in accordance with Articles 5.1, 5.2 and 5.3 of that Agreement; or
(b) with respect to any existing import licensing procedure, in that Party's most recent annual submission, due before the date of entry into force of this Agreement, to the WTO Committee on Import Licensing in response to the annual questionnaire on import licensing procedures described in Article 7.3 of the Import Licensing Agreement, it has provided, with respect to that procedure, the information requested in that questionnaire.
Chapter 4. RULES OF ORIGIN
Section A. General Provisions
Article 4.1. Definitions
For the purposes of this Chapter:
adjusted value is:
(i) the FOB value of the good determined in accordance with the Customs Valuation Agreement, inclusive of the cost of transport and insurance to the port or site of final shipment abroad; or
(ii) if there is no FOB value of the good or it is unknown and cannot be ascertained, the value determined in accordance with the Customs Valuation Agreement, mutatis mutandis,
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;
competent governmental authority means the authority that is responsible for the issuing of a certificate of origin or for the designation of certification entities or bodies. For Indonesia, this refers to the Ministry of Trade, and for Australia, this refers to the Department of Foreign Affairs and Trade;
exporter means a person located in an exporting Party who exports a good from the exporting Party in accordance with the applicable laws and regulations of the exporting Party;
FOB means the free-on-board value of the good, inclusive of the cost of transport to the port or site of final shipment abroad. The valuation shall be made in accordance with Article VII of GATT 1994 and the Customs Valuation Agreement;
generally accepted accounting principles means the recognised consensus or substantial authoritative support in 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 encompass broad guidelines of general application as well as detailed standards, practices and procedures;
good means any merchandise, product, article or material;
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;
importer means a person who imports a good into the importing Party in accordance with the applicable laws and regulations of the importing Party;
indirect material means a good used in the production, testing, or inspection of a good but not physically incorporated into the good, or a good used in the maintenance of buildings 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 and buildings;
(iv) lubricants, greases, compounding materials and other materials used in production or used to operate equipment and buildings;
(v) gloves, glasses, footwear, clothing, safety equipment and supplies;
(vi) equipment, devices and supplies used for testing or inspecting goods;
(vii) catalysts and solvents; and (viii) any other goods that are not incorporated into the good but whose use in the production of the good can reasonably be demonstrated to be a part of that production;
Issuing Body means a certification entity or body designated by the competent governmental authority of the exporting Party to issue the certificates of origin;
material means any matter or substance used or consumed in the production of goods or physically incorporated into a good or subjected to a process in the production of another good;
non-originating good or non-originating material means a good or material that does not qualify as originating under this Chapter;
originating material means a material that qualifies as originating under this Chapter;
packaging materials and containers for retail sale means materials or containers in which a good is packaged or presented for its retail sale;
producer means a person who grows, mines, raises, harvests, fishes, traps, hunts, farms, captures, gathers, collects, breeds, extracts, manufactures, processes or assembles a good;
product specific rules are rules in Annex 4-C that specify that the materials used to produce a good have undergone a change in tariff classification or a specific manufacturing or processing operation, or satisfy a qualifying value content (QVC) criterion; and
production means methods of obtaining goods including growing, mining, harvesting, farming, raising, breeding, extracting, gathering, collecting, capturing,
fishing, trapping, hunting, manufacturing, producing, processing or assembling a good.
Section B. Originating Goods
Article 4.2. Originating Goods
For the purposes of this Agreement, a good shall qualify as an originating good, where it: (a) is wholly produced or obtained in a Party as provided in Article 4.3;
(b) is not wholly produced or obtained in a Party provided that the good has satisfied the requirement of Article 4.4;
(c) is produced in a Party exclusively from originating materials; or (d) otherwise qualifies as an originating good under this Chapter,
and meets all other applicable requirements of this Chapter.
Article 4.3. Wholly Obtained or Produced Goods
For the purposes of Article 4.2, a good that is wholly obtained or produced in the territory of a Party means:
(a) plants and plant goods, including fruit, flowers, vegetables, trees, seaweed, fungi and live plants, grown, harvested, picked, or gathered there;
(b) live animals born and raised there;
(c) goods obtained from live animals there;
(d) goods obtained from hunting, trapping, fishing, farming, aquaculture, gathering, or capturing there;
(e) minerals and other naturally occurring substances extracted or taken from the soil, waters, seabed or beneath the seabed there;
(f) goods of sea-fishing and other marine goods taken from the high seas, in accordance with international law, by any vessel registered or recorded with a Party and entitled to fly the flag of that Party;
(g) goods produced on board any factory ship registered or recorded with a Party and entitled to fly the flag of that Party from the goods referred to in subparagraph (f);
(h) goods taken by a Party, or a person of a Party, from the seabed or beneath the seabed beyond the Exclusive Economic Zone and adjacent Continental Shelf of that Party and beyond areas over which non-parties exercise jurisdiction under exploitation rights granted in accordance with international law;
(i) goods which are:
(i) waste and scrap derived from production or consumption there; provided that such goods are fit only for the recovery of raw materials; or
(ii) used goods collected there; provided that such goods are fit only for the recovery of raw materials; and
(j) goods obtained or produced there solely from products referred to in subparagraphs (a) to (i) or from their derivatives.
Article 4.4. Goods Not Wholly Produced or Obtained
1. For the purposes of Article 4.2(b) a good is an originating good of a Party if it satisfies the product specific rules set out in Annex 4-C.
2. Where a product specific rule provides a choice of rules from a QVC-based rule of origin, a Change of Tariff Classification ( "CTC" ) based rule of origin, a specific manufacturing or processing operation each Party shall permit the exporter of the goods to decide which rule to use in determining whether the goods qualify as originating goods of the Party.
3. Where product specific rules specify a certain QVC, the QVC shall be calculated using one of the methods set out in Article 4.5.
4. Where product specific rules requiring that the materials used have undergone CTC or a specific manufacturing or processing operation, the rules shall apply only to non-originating materials.
5. Notwithstanding paragraph 1 of this Article, a good which is covered by Attachment A or B of the Ministerial Declaration on Trade in Information Technology Products adopted in the Ministerial Conference of the WTO on 13 December 1996 shall be deemed to be originating in a Party if it is assembled from materials covered under the same Attachments.
Article 4.5. Calculation of Qualifying Value Content
For the purposes of Article 4.4, the formula for calculating the qualifying value content (QVC) will be either:
Direct Formula (Build-up Method)
C= IA-CEPA material cost + labour cost + overhead costs + profit + other costs x 100
Adjusted Value
or
Indirect Formula (Build-down Method)
QVC= Adjusted Value − Value of Non-Originating Materials x 100
Adjusted Value
where:
QVC is the qualifying value content, expressed as a percentage;
IA-CEPA material cost is the value of originating materials, parts or produce that are acquired or self-produced by the producer in the production of the good;
labour costs are wages, remuneration and other employee benefits associated with the production of the goods;
overhead costs are the cost of the following, to the extent that the cost can be attributed to the production of the goods:
(i) inspection and testing of materials and goods;
(ii) insurance of plant, equipment and materials;
(iii) dies, moulds and tooling;
(iv) depreciation, maintenance and repair of plant and equipment;
(v) interest payments for plant and equipment;
(vi) research, development, design and engineering;
(vii) the production of the goods:
following items in relation to real property used for the
(A) insurance;
(B) rent and lease payments;
(C) mortgage interest;
(D) depreciation on buildings;
(E) maintenance and repair; and
(F) rates and taxes;
(vii) leasing plant and equipment;
(viii) energy, electricity, water and other utilities;
(ix) storage of the goods within the place in which the production of the goods occurs;
(x) royalties or licences for patented machines or processes used in the production of the goods or for the right to produce the goods;
(xi) disposal of non-recyclable waste; and
(xii) security within the place in which the production of the goods occurs.
profit is an amount equivalent to the profit added in the normal course of trade, or equal to the profit that is usually reflected in the sale of goods of the same class or kind as the self-produced material that is being valued.
other costs are costs incurred in placing the goods in a ship or other means of transport for exportation and includes transport costs, storage and warehousing costs, port handling fees, brokerage fees and service charges.
value of non-originating materials is the value of the non-originating materials that are acquired and used in the production of the goods, but does not include, as applicable:
(i) the value of a material that is self-produced;
(ii) the costs of freight, insurance, packing and all other costs incurred to transport the material to the location of the producer of the good;
(iii) duties, taxes and customs brokerage fees on the material, paid in the territory of one or both of the Parties, other than duties and taxes that are waived, refunded, refundable or otherwise recoverable, which include credit against duty or tax paid or payable;
(iv) the cost of waste and spoilage resulting from the use of the material in the production of the good, less the value of reusable scrap or by- product;
(v) the cost of processing incurred in the territory of one or both of the Parties in the production of the non-originating material; and
(vi) the cost of originating materials used in the production of the non- originating material in the territory of one or both of the Parties.
Article 4.6. Recording of Costs
For the purposes of this Chapter, all costs shall be recorded and maintained in accordance with the generally accepted accounting principles applicable in the Party in which the good is produced.
Article 4.7. Accumulation
For the purposes of Article 4.2, a good which complies with the origin requirements provided therein and which is used in another Party as a material in the production of another good shall be considered to originate in the Party where working or processing of the finished good has taken place.
Article 4.8. Minimal Operations and Processes
Where a claim for origin is based solely on a QVC, the operations or processes listed below, undertaken by themselves or in combination with each other, are considered to be minimal and shall not be taken into account in determining whether or not a good is originating:
(a) ensuring preservation of goods in good condition for the purposes of transport or storage;
(b) facilitating shipment or transportation;
(c) packaging or presenting goods for transportation or sale;
(d) simple processes, consisting of sifting, classifying, washing, and other similar operations;
(e) affixing of marks, labels or other like distinguishing signs on products or their packaging; and
(f) mere dilution with water or another substance that does not materially alter the characteristics of the goods.
Article 4.9. De Minimis
1. A good that does not satisfy a change in tariff classification requirement in accordance with Article 4.4 will nonetheless be an originating good if:
(a) for a good, other than that provided for in Chapters 50 to 63 of the HS Code, 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 adjusted value of the good; or
(b) for a good provided for in Chapters 50 to 63 of the HS Code, the weight 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 of the good, or 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 adjusted value of the good, and the good meets all other applicable criteria of this Chapter.
2. The value of such materials shall, however, be included in the value of non- originating materials for any applicable QVC requirement.
Article 4.10. Accessories, Spare Parts, Tools and Instructional or other Information Materials
The origin of the accessories, spare parts, tools and Instructional or Other Information Materials presented and classified with a good and delivered with the good at the time of importation:
(a) shall be disregarded if the good is subject to a change in tariff classification requirement; and
(b) shall be taken into account as originating or non-originating materials, as the case may be, in calculating the QVC of the good, if the good is subject to a QVC requirement, provided that:
(c) the accessories, spare parts, tools and Instructional or Other Information Materials are not invoiced separately from the good and are included in the price of the good, regardless of whether they appear specified or separately identified in the invoice itself; and
(d) the quantities and value of the accessories, spare parts or tools are customary for the good.
Article 4.11. 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 principles 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 4.12. Packaging Materials and Containers for Retail Sale
1. Packaging materials and containers in which a good is packaged for retail sale shall, if classified with the good, be disregarded in determining whether all the non- originating materials used in the production of the good undergo the applicable change in tariff classification or a specific manufacturing or processing operation, set out in Annex 4-C.
2. If a good is subject to a QVC requirement, the value of packaging materials and containers described in paragraph 1 shall be taken into account as originating or non- originating materials, as the case may be, in calculating the QVC of the good.
Article 4.13. Packing Materials and Containers for Transportation and Shipment
1. Packing materials and containers for transportation and shipment shall not be taken into account when determining whether a good is an originating good.
2. For the purposes of paragraph 1, "packing materials and containers for transportation and shipment" means the goods used to protect a good during its transportation and does not include the packaging materials and containers in which the good is packaged for retail sale.