(b) have a similar life expectancy and enjoy a factory warranty similar to such new goods;
total cost means all product costs, period costs, and other costs for a good incurred in the territory of one or more of the Parties. Product costs are costs that are associated with the production of a good and include the value of materials, direct labor costs, and direct overhead. Period costs are costs, other than product costs, that are expensed in the period in which they are incurred, such as selling expenses and general and administrative expenses. Other costs are all costs recorded on the books of the producer that are not product costs or period costs, such as interest. Total cost does not include profits that are earned by the producer, regardless of whether they are retained by the producer or paid out to other persons as dividends, or taxes paid on those profits, including capital gains taxes;
used means utilized or consumed in the production of goods; and
value means the value of a good or material for purposes of calculating customs duties or for purposes of applying this Chapter.
Chapter Five. Customs Administration and Trade Facilitation
Article 5.1. Publication
1. Each Party shall publish, including on the Internet, its customs laws, regulations, and general administrative procedures.
2. Each Party shall designate or maintain one or more inquiry points to address inquiries by interested persons concerning customs matters and shall make available on the Internet information concerning the procedures for making such inquiries.
3. To the extent possible, each Party shall publish in advance any regulations of general application governing customs matters that it proposes to adopt and provide interested persons the opportunity to comment prior to their adoption.
Article 5.2. Release of Goods
1. Each Party shall adopt or maintain simplified customs procedures for the efficient release of goods in order to facilitate trade between the Parties.
2. Pursuant to paragraph 1, each Party shall adopt or maintain procedures that:
(a) provide for the release of goods within a period no greater than that required to ensure compliance with its customs laws, and to the extent posible release the goods within 48 hours of arrival;
(b) allow goods to be released at the point of arrival, without temporary transfer to warehouses or other facilities; and
(c) allow importers to withdraw goods from customs before and without prejudice to the final determination by its customs authority of the applicable customs duties, taxes, and fees. (1)
Article 5.3. Automation
Each Party shall endeavor to use information technology that expedites procedures for the release of goods. When deciding on the information technology to be used for this purpose, each Party shall:
(a) endeavor to use international standards;
(b) make electronic systems accessible to customs users;
(c) provide for electronic submission and processing of information and data before arrival of the shipment to allow for the release of goods on arrival;
(d) employ electronic or automated systems for risk analysis and targeting;
(e) work towards developing compatible electronic systems among the Parties' customs authorities, to facilitate government to government exchange of international trade data; and
ff) work towards developing a set of common data elements and processes in accordance with World Customs Organization (WCO) Customs Data Model and related WCO recommendations and guidelines.
Article 5.4. Risk Management
Each Party shall endeavor to adopt or maintain risk management systems that enable its customs authority to focus its inspection activities on high-risk goods and that simplify the clearance and movement of low-risk goods, while respecting the confidential nature of the information it obtains through such activities.
Article 5.5. Cooperation
1. With a view to facilitating the effective operation of this Agreement, each Party shall endeavor to provide each other Party with advance notice of any significant modification of administrative policy or other similar development related to its laws or regulations governing importations that is likely to substantially affect the operation of this Agreement.
2. The Parties shall cooperate in achieving compliance with their respective laws and regulations pertaining to:
(a) the implementation and operation of the provisions of this Agreement governing importations or exportations, including claims of origin and origin procedures;
(b) the implementation and operation of the Customs Valuation Agreement;
(c) restrictions or prohibitions on imports or exports; and
(d) other customs matters as the Parties may agree.
3. Where a Party has a reasonable suspicion of unlawful activity related to its laws or regulations governing importations, the Party may request that another Party provide specific confidential information normally collected in connection with the importation of goods.
4. A Party's request under paragraph 3 shall be in writing, shall specify the purpose for which the information is sought, and shall identify the requested information with sufficient specificity for the other Party to locate and provide the information.
5. The Party from whom the information is requested shall, in accordance with its law and any relevant international agreements to which it is a party, provide a written response containing such information.
6. For purposes of paragraph 3, "a reasonable suspicion of unlawful activity" means a suspicion based on relevant factual information obtained from public or private sources comprising one or more of the following:
(a) historical evidence of non-compliance with laws or regulations governing importations by an importer or exporter;
(b) historical evidence of non-compliance with laws or regulations governing importations by a manufacturer, producer, or other person involved in the movement of goods from the territory of one Party to the territory of another Party;
(c) historical evidence that some or all of the persons involved in the movement from the territory of one Party to the territory of another Party of goods within a specific product sector have not complied with a Party's laws or regulations governing importations; or
(d) other information that the requesting Party and the Party from whom the information is requested agree is sufficient in the context of a particular request.
7. Each Party shall endeavor to provide another Party with any other information that would assist that Party in determining whether imports from or exports to that Party are in compliance with the other Party's laws or regulations governing importations, in particular those related to the prevention of unlawful activities such as smuggling and similar infractions.
8. For purposes of facilitating trade between the Parties, each Party shall endeavor to provide the other Parties with technical advice and assistance for the purpose of improving risk assessment and risk management techniques, facilitating the implementation of international supply chain standards, simplifying and expediting customs procedures for the timely and efficient clearance of goods, advancing the technical skill of personnel, and enhancing the use of technologies that can lead to improved compliance with regard to a Party's laws or regulations governing importations.
9. The Parties shall endeavor to cooperate to enhance each Party's ability to enforce its regulations governing importations. The Parties shall further endeavor to establish and maintain other channels of communication to facilitate the secure and rapid exchange of information and to improve coordination on importation issues.
Article 5.6. Confidentiality
1. Where a Party providing information to another Party in accordance with this Chapter designates the information as confidential, the other Party shall maintain the confidentiality of the information. The Party providing the information may require a written assurance from the other Party that the information will be held in confidence, will be used only for the purposes specified in the other Party's request for information, and will not be disclosed without the Party's specific permission.
2. A Party may decline to provide information requested by another Party where that Party has failed to act in conformity with the assurance provided under paragraph 1.
3. Each Party shall adopt or maintain procedures in which confidential information, including information the disclosure of which could prejudice the competitive position of the person providing the information, submitted in accordance with the administration of the Party's customs laws, shall be protected from unauthorized disclosure.
Article 5.7. Express Shipments
Each Party shall adopt or maintain expedited customs procedures for express shipments while maintaining appropriate customs control and selection. These procedures shall:
(a) provide a separate and expedited customs procedure for express shipments;
(b) provide for the submission and processing of information necessary for the release of an express shipment before the express shipment arrives;
(c) allow submission of a single manifest covering all goods contained in a shipment transported by an express shipment service, through, if possible, electronic means;
(d) to the extent possible, provide for clearance of certain goods with a minimum of documentation;
(e) under normal circumstances, provide for clearance of express shipments within six hours after submission of the necessary customs documents, provided the shipment has arrived;
(f) apply without regard to weight or customs value; and
(g) provide, under normal circumstances, that no customs duties or taxes will be assessed on, nor will formal entry documents be required for, express shipments valued at US$200 or less. (2)
Article 5.8. Review and Appeal
Each Party shall ensure that with respect to its determinations (3) on customs matters, importers in its territory have access to:
(a) a level of administrative review independent of the employee or office that issued the determinations; and
(b) judicial review of the determinations.
Article 5.9. Penalties
Each Party shall adopt or maintain measures that allow for the imposition of civil or administrative penalties and, where appropriate, criminal sanctions for violations of its customs laws and regulations, including those governing tariff classification, customs valuation, country of origin, and claims for preferential treatment under this Agreement.
Article 5.10. Advance Rulings
1. Each Party shall issue, before a good is imported into its territory, a written advance ruling at the written request of an importer in its territory, or an exporter or producer (4) in the territory of another Party with regard to:
(a) tariff classification;
(b) the application of customs valuation criteria for a particular case, in accordance with the application of the provisions set forth in the Customs Valuation Agreement;
(c) the application of duty drawback, deferral, or other relief from customs duties;
(d) whether a good is originating in accordance with Chapter Four (Rules of Origin and Origin Procedures);
(e) whether a good re-entered into the territory of a Party after being exported to the territory of the other Party for repair or alteration is eligible for duty free treatment in accordance with Article 2.6 (Goods Re-entered after Repair or Alteration);
(f) country of origin marking;
(g) the application of quotas; and
(h) such other matters as the Parties may agree.
2. Each Party shall issue an advance ruling within 150 days after a request, provided that the requester has submitted all information that the Party requires, including, if the Party requests, a sample of the good for which the requester is seeking an advance ruling. In issuing an advance ruling, the Party shall take into account facts and circumstances the requester has provided.
3. Each Party shall provide that advance rulings shall be in force from their date of issuance, or another date specified in the ruling, provided that the facts or circumstances on which the ruling is based remain unchanged.
4. The issuing Party may modify or revoke an advance ruling after the Party notifies the requester. The issuing Party may modify or revoke a ruling retroactively only if the ruling was based on inaccurate or false information.
5. Subject to any confidentiality requirements in its laws, each Party shall make its advance rulings publicly available.
6. If a requester provides false information or omits relevant facts or circumstances relating to the advance ruling, or does not act in accordance with the ruling's terms and conditions, the importing Party may apply appropriate measures, including civil, criminal, and administrative actions, monetary penalties, or other sanctions.
Article 5.11. Implementation
1. For Peru:
(a) Articles 5.1.1, 5.1.2, and 5.7 shall enter into force two years after the date of entry into force of this Agreement;
(b) Article 5.10 shall enter into force three years after the date of entry into force of this Agreement; and
(c) Article 5.2 shall enter into force one year after the date of entry into force of this Agreement.
Chapter Six. Sanitary and Phytosanitary Measures
Objectives
The objectives of this Chapter are to protect human, animal, or plant life or health in the Parties' territories, enhance the Parties' implementation of the SPS Agreement, provide a Standing Committee for addressing sanitary and phytosanitary matters, attempt to resolve trade issues, and thereby expand trade opportunities.
Article 6.1. Scope and Coverage
This Chapter applies to all sanitary and phytosanitary measures of a Party that may, directly or indirectly, affect trade between the Parties.
Article 6.2. General Provisions
1. Further to Article 1.2 (Relation to Other Agreements), the Parties affirm their existing rights and obligations with respect to each other under the SPS Agreement.
2. No Party may have recourse to dispute settlement under this Agreement for any matter arising under this Chapter.
Article 6.3. Standing Committee on Sanitary and Phytosanitary Matters
1. Not later than 30 days after the date of entry into force of this Agreement, the Parties shall establish a Standing Committee on Sanitary and Phytosanitary Matters (the "Standing Committee"). The objectives of the Standing Committee shall be to enhance the implementation by each Party of the SPS Agreement, protect human, animal, or plant life or health, enhance consultation and cooperation between the Parties on sanitary and phytosanitary matters, and address measures affecting trade between the Parties.
2. The Parties shall establish the Standing Committee through an exchange of letters identifying the primary representative of each Party to the Standing Committee and establishing the Standing Committee's terms of reference.
3. The Standing Committee shall seek to enhance any present or future relationships between the Parties' agencies and ministries with responsibility for sanitary and phytosanitary matters.
4. The Standing Committee shall provide a forum for:
(a) improving the Parties' understanding of specific issues relating to the implementation of the SPS Agreement;
(b) enhancing mutual understanding of each Party's sanitary and phytosanitary measures and the regulatory processes that relate to those measures;
(c) consulting on and attempting to resolve matters related to the development or application of sanitary and phytosanitary measures that affect, or may affect, trade between the Parties;
(d) coordinating and making recommendations on technical assistance programs on sanitary and phytosanitary matters to the Committee on Trade Capacity Building; and
(e) consulting on issues, positions, and agendas for meetings of the WTO SPS Committee, the various Codex Committees (including the Codex Alimentarius Commission), the International Plant Protection Convention, the World Organization for Animal Health, and other international and regional fora on food safety and human, animal, and plant health.
5. The Standing Committee shall meet at least once a year unless the Parties otherwise agree.
6. The Standing Committee shall perform its work in accordance with its terms of reference. The Standing Committee may revise its terms of reference and establish procedures to guide its operation.
7. The Standing Committee may establish ad hoc technical working groups, as needed, in accordance with its terms of reference.
8. Each Party shall ensure that appropriate representatives with responsibility for the development, implementation, and enforcement of sanitary and phytosanitary measures from its relevant trade and regulatory agencies or ministries participate in meetings of the Standing Committee.
9. All decisions of the Standing Committee shall be taken by consensus, unless the Committee otherwise decides.
Chapter Seven. Technical Barriers to Trade
Objectives
The objectives of this Chapter are to increase and facilitate trade and obtain effective market access through the improved implementation of the TBT Agreement, the elimination of unnecessary technical barriers to trade, and the enhancement of bilateral cooperation.
Article 7.1. Affirmation of the TBT Agreement
Further to Article 1.2 (Relation to Other Agreements), the Parties affirm their existing tights and obligations with respect to each other under the TBT Agreement.
Article 7.2. Scope and Coverage
1. This Chapter applies to the preparation, adoption, and application of all standards, technical regulations, and conformity assessment procedures of central government bodies that may, directly or indirectly, affect trade in goods between the Parties, (1) including any amendments (2) thereto and any addition to their rules or the product coverage thereof, except amendments and additions of an insignificant nature.
2. Notwithstanding paragraph 1, this Chapter does not apply to:
(a) technical specifications prepared by governmental bodies for production or consumption requirements of such bodies; and
(b) sanitary and phytosanitary measures.
Article 7.3. Trade Facilitation
1. The Parties shall intensify their joint work in the field of standards, technical regulations, and conformity assessment procedures with a view to facilitating trade between the Parties. In particular, the Parties shall seek to identify, develop, and promote trade facilitating initiatives regarding standards, technical regulations, and conformity assessment procedures that are appropriate for particular issues or sectors, taking into consideration the Parties' experience in other bilateral, regional, and multilateral agreements, as appropriate. Such initiatives may include cooperation on regulatory issues, such as convergence, alignment with international standards, reliance on a supplier's declaration of conformity, the recognition and acceptance of the results of conformity assessment procedures, and the use of accreditation to qualify conformity assessment bodies.
2. In determining whether an international standard, guide, or recommendation within the meaning of Articles 2 and 5 and Annex 3 of the TBT Agreement exists, each Party shall apply the principles set out in Decisions and Recommendations adopted by the Committee since 1 January 1995, G/TBT/1/Rev.8, 23 May 2002, Section IX (Decision of the Committee on Principles for the Development of International Standards, Guides and Recommendations with relation to Articles 2, 5 and Annex 3 of the Agreement) issued by the WTO Committee on Technical Barriers to Trade.
3. Where a Party detains at a port of entry a good originating in the territory of another Party due to a perceived failure to comply with a technical regulation, it shall immediately notify the importer of the reasons for the detention.
4. On request of another Party, a Party shall give favorable consideration to any sector- specific proposal that the requesting Party makes for further cooperation under this Chapter.
Article 7.4. Conformity Assessment
1. The Parties recognize that a broad range of mechanisms exists to facilitate the acceptance in a Party's territory of the results of conformity assessment procedures conducted in another Party's territory. For example:
(a) the importing Party may rely on a supplier's declaration of conformity;
(b) a conformity assessment body located in the territory of a Party may enter into a voluntary arrangement with a conformity assessment body located in the territory of another Party to accept the results of each other's assessment procedures;
(c) a Party may agree with another Party to accept the results of conformity assessment procedures that bodies located in the other Party's territory conduct with respect to specific technical regulations;
(d) a Party may adopt accreditation procedures for qualifying conformity assessment bodies located in the territory of another Party;
(e) a Party may designate conformity assessment bodies located in the territory of another Party; and
(f) a Party may recognize the results of conformity assessment procedures conducted in the territory of another Party.
The Parties shall intensify their exchange of information on these and other similar mechanisms.
2. Where a Party does not accept the results of a conformity assessment procedure conducted in the territory of another Party, it shall, on request of that other Party, explain the reasons so that corrective action may be taken, if necessary.
3. Each Party shall accredit, approve, license, or otherwise recognize conformity assessment bodies in the territories of the other Parties on terms no less favorable than those it accords to conformity assessment bodies in its territory. Where a Party accredits, approves, licenses, or otherwise recognizes a body assessing conformity with a specific technical regulation or standard in its territory and refuses to accredit, approve, license, or otherwise recognize a body assessing conformity with that technical regulation or standard in the territory of another Party, it shall, on request of that other Party, explain the reasons for its decision so that corrective action may be taken, if necessary.
4. Where a Party declines a request from another Party to engage in negotiations or conclude an agreement on facilitating recognition in its territory of the results of conformity assessment procedures conducted by bodies in the other Party's territory, it shall, on request of that other Party, explain the reasons for its decision.
Article 7.5. Technical Regulations
1. Where a Party provides that foreign technical regulations may be accepted as equivalent to a specific technical regulation of its own, and the Party does not accept a technical regulation of another Party as equivalent to that technical regulation, it shall, at the request of that other Party, explain the reasons for its decision. A Party seeking the acceptance of its technical regulation as equivalent should provide, as appropriate, information regarding the relationship of its technical regulation to international standards referenced in the technical regulation of the other Party, the circumstances which gave rise to the adoption of its technical regulation, and the similarity of the respective conformity assessment procedures.
2. Where a Party does not provide that foreign technical regulations may be accepted as equivalent to its own, it shall, at the request of another Party, explain its reasons for not accepting that other Party's technical regulations as equivalent.
3. At the request of a Party which may have an interest in developing a similar technical regulation, and in order to minimize duplicate expenses, the other Party shall provide any available information, studies, or other relevant documents, except for confidential information on which it has relied in the development of a technical regulation.
Article 7.6. Transparency
1. Each Party shall allow persons of the other Parties to participate in the development of its standards, technical regulations, and conformity assessment procedures. Each Party shall permit persons of the other Parties to participate in the development of such measures on terms no less favorable than those accorded to its own persons and to persons of any other Party.
2. Each Party shall recommend that non-governmental standardizing bodies in its territory observe paragraph 1.
3. In order to enhance the opportunity for persons to be aware of, and to understand, proposed technical regulations and conformity assessment procedures, and to be able to provide meaningful comments on such regulations and procedures, a Party publishing a notice and filing a notification under Article 2.9, 3.2, 5.6 or 7.2 of the TBT Agreement, shall:
(a) include in the notice a statement describing the objective of the proposed technical regulation or conformity assessment procedure and the rationale for the approach the Party is proposing; and
(b) transmit the proposal electronically to the other Parties through the inquiry points each Party has established under Article 10 of the TBT Agreement at the same time as it notifies other WTO Members of the proposal pursuant to the TBT Agreement.
Each Party shall publish and notify those technical regulations that are in accordance with the technical content of any relevant international standards.
Each Party should allow at least 60 days after it transmits a proposal under subparagraph (b) for persons and the other Parties to provide comments in writing on the proposal. A Party shall give favorable consideration to reasonable requests for extending the comment period.