12. If the exporter or producer of a good does not grant its consent in writing for the verification visit within 30 days reckoned from the date of reception of the notification referred to in paragraph 10, the competent authority for verification of origin of the importing Party shall notify in writing to the exporter or producer and the competent authority for issuing certificates of origin its negative decision, including the facts and legal grounds.
13. In accordance with paragraph 12, the customs authority of the importing Party may deny preferential tariff treatment to such good by giving written notice of its decision to the importer, including the facts and the legal grounds for such decision.
14. The competent authority for verification of origin of the importing Party shall not issue a negative determination of origin for a good if within 15 days following the date of reception of the notice, and for only once, the producer or the exporter requests the deferment of the proposed verification visit with due justification, for a period not exceeding 30 days reckoned from the date given under paragraph 11 (c), or for a longer period agreed to by the competent authority for verification of the importing Party and the competent authority for issuing certificates of origin of the exporting Party.
15. In accordance with the provisions of paragraph 3 (b), the competent authority for verification of origin of the importing Party shall permit an exporter or producer who is subject to a verification visit to designate two observers to be present during the visit and to only act as such. The fact that there is no designation of observers shall not be reason for the visit to be postponed.
16. The customs authority of the importing Party may deny preferential tariff treatment to a good subject to a verification of origin when, during a verification visit, the exporter or producer of the good does not make available to the competent authority for verification of origin of the importing Party the records and documents referred to in Article 4.25.
17. When the verification visit has been completed, the competent authority for verification of origin of the importing Party shall draw up a record of the visit. The exporter or producer subject to the visit may sign the minutes. If the exporter or the producer refuses to sign, the fact shall be stated on record, without affecting the validity of the procedure.
18. The competent authority for verification of origin of the importing Party shall notify in writing to the competent authority for issuing certificates origin of the exporting Party, within a period not longer than 365 days from the initiation of the verification process of the results of the determination of origin of the goods as well as the factual and legal grounds on which such determination was based; it may include a decision as to the validity or otherwise of the certificate of origin. If such notice is not given, preferential tariff treatment on goods subject to verification cannot be denied.
19. When through a verification of origin process, the competent authority for verification of origin of the importing Party determines that an exporter or a producer has provided more than one false or inconsistent statement or information, in the sense that a good qualifies as originating, the customs administration of the importing Party may suspend the preferential tariff treatment to identical goods exported by that exporter or producer. The customs authority of the importing Party shall grant preferential tariff treatment to the goods once they comply with the provisions of this Chapter.
Article 4.27. Sanctions
Each Party shall impose penal, civil or administrative sanctions for violation of its laws and regulations in connection with the provisions of this Chapter. (2)
Article 4.28. Confidentiality
1. Where a Party furnishes information to another Party in accordance with this Chapter, and designates it, clearly and specifically, as confidential, the other Party shall maintain the confidentiality of such information in accordance with the provisions of its legislation.
2. The Party providing the information may require from the other Party a written statement to the effect that the information will be kept confidential and will be used only for the purposes specified in the request for information of the other Party.
3. A Party may decline to provide information requested by other party when that party has not acted in accordance with paragraph 1.
4. Each Party shall, in accordance with its law, adopt or maintain procedures by which the confidential information submitted by another Party, including information that if disclosed could harm the competitive position of the person who provides it, be protected from a disclosure that violates the terms of this Article.
Article 4.29. Review and Appeal
Each Party shall ensure in respect of its administrative acts on matters covered by this Chapter, that producers, exporters or importers in its territory have access to:
(a) An independent administrative review of the instance or the official who issued such administrative act, in accordance with its laws and
(b) A judicial review of the administrative acts.
Article 4.30. Committee on Rules of Origin and Procedures In Connection with Origin, Trade Facilitation and Customs Cooperation
1. The Parties establish a Committee on Rules of Origin and Procedures in Connection with Origin, Trade Facilitation and Customs Cooperation (hereinafter referred to as the "Committee"), composed of representatives of each Party, and with jurisdiction over the provisions of this Chapter and Chapter 5 (Trade Facilitation and Customs Cooperation).
2. The Committee shall have the following functions:
(a) Monitor the implementation and administration of the Chapters cited in paragraph 1;
(b) Propose to the Free Trade Commission:
(i) Adjustments and modifications to Annex 4.2 as a result of amendments to the Harmonized System (HS) or the evaluation of an application by a party;
(ii) Any amendment or interpretation of the provisions of the Chapters listed in paragraph 1, and
(iii) Modifications to the format and instructions of the certificate of origin referred to in Article 4.17;
(c) Resolve any dispute in connection with the tariff classification. If the Committee does not reach a decision, it may make appropriate consultations to the World Customs Organization whose recommendation will be considered by the Parties.
(d) Address any other matter in connection with the Chapters cited in paragraph 1.
3. Unless the Parties agree otherwise, the Committee shall meet once a year, on the date and an agenda previously agreed by the Parties. The Parties shall determine those cases in which extraordinary meetings may be conducted.
4. Meetings may be conducted through any means agreed upon by the Parties. When they are face-to-face, they shall be held alternately in the territory of each Party and the host Party shall organize the meeting.
Article 4.31. Short Supply Committee
The Parties shall establish a Committee on Short Supply (CEA in Spanish, hereinafter referred to as "CSS"), which shall operate in accordance with the provisions in Annex 4.31.
Article 4.32. CSS Criteria
1. Any party may request a waiver for the use of materials non- originating under chapters 50 through 60 of the Harmonized System (HS) used in the production of goods falling within Chapter 50 through 63 of the Harmonized System (HS), whose use is required by the rule of origin set out in Annex 4.2 for such good, and which are not available in normal commercial terms because one of the following shortage cases arises: absolute, for volume and conditions for timely delivery in the territory of the Parties.
2. For the purposes of paragraph 1, the CSS shall execute the procedure in Annex 4.31. In the case there is supply of the material requested in the territory of the Parties, representatives of the CSS shall ensure the requesting Party that the shortage of supply cases are not configured: absolute, for volume and conditions for timely delivery for such material, in accordance with the information provided in the investigation and the procedure provided in Annex 4.31.
3. If the requesting party does not receive a response within the time-frame under Annex 4.31 or there is no supply of the material requested, it shall be understood that there is a shortage of supply in the territory of the Parties. The supply of the material shall start from the date of the entry into force of the decision rendered by the CSS in accordance with the procedure provided in Annex 4.31.
Chapter 5. TRADE FACILITATION AND CUSTOMS COOPERATION
Article 5.1. Definitions
For the purposes of this Chapter: Customs administration means:
(a) In the case of Chile, the Servicio Nacional de Aduanas (National Customs Service), or its successor;
(b) In the case of Colombia, the Dirección de Impuestos y Aduanas Nacionales, DIAN (National Directorate of Customs and Taxes) or its successor;
(c) In the case of Mexico, the Secretaría de Hacienda y Crédito Publico (Department of Finance and Public Credit), or its successor, and
(d) In the case of Peru, the Superintendencia Nacional de Aduanas y de Administración Tributaria - SUNAT (the National Superintendence of Customs and Tax Administration) or its successor;
Information means data information, documents, reports or other communications in any format, including electronic, as well as certified or authenticated copies of such information;
Customs legislation means legal and administrative provisions, for which the implementation is responsibility of customs administrations in the territory of each Party, regulating the procedure for imports, exports, transit of goods or any other customs procedure, including prohibition, restriction and control measures;
Operations in breach of customs legislation means any violation or attempted violation of the customs legislation of each Party;
Requested party means the customs administration from which cooperation or assistance in customs matters is requested, and
Requesting party means the customs administration seeking cooperation or assistance in customs matters.
Article 5.2. Confidentiality
1. Where a Party furnishes information to another Party in accordance with this Chapter and indicates, clearly and specifically, that it is to be treated as confidential, such other Party shall maintain the confidentiality of that information in accordance with the provisions of their legislation.
2. The Party providing the information may require from the other Party a written declaration to the effect that the information provided shall be kept confidential and shall be used only for the purposes specified in the information request of the other Party.
3. A Party may decline to provide information requested by another Party when such a
Party has not acted in accordance with paragraph 1.
4. Each Party shall, in accordance with its legislation, adopt or maintain procedures through which the confidential information submitted by other Party, including information whose disclosure could harm the competitive position of the person who provides such information, is protected from a disclosure that violates the terms of this Article.
Section A. Trade Facilitation
Article 5.3. Publication
1. Each Party shall publish, including on the Internet, its customs laws.
2. Each Party shall designate or maintain one or more inquiry points to address inquiries from people interested in customs matters, and shall make available on Internet information easily accessible for making such inquiries.
3. To the extent possible, each Party shall publish in advance any regulations of general application governing customs matters that the Party intends to adopt, and shall provide the interested persons an opportunity to provide comments prior to its adoption.
Article 5.4. Clearance of Goods
1. Each Party shall adopt or maintain simplified customs procedures for the efficient clearance of goods, in order to facilitate trade between Parties.
2. In accordance with paragraph 1, each Party shall adopt or maintain procedures that:
(a) Provide that the clearance of goods be made within a period not greater than the time required to ensure compliance with customs legislation, and, to the extent possible, that the goods are released within 48 hours of arrival;
(b) Permit, to the extent possible, that the goods be released at the point of entry, without temporary transfer to warehouses or other facilities, and
(c) Allow importers, in accordance with its legislation, to withdraw the goods from customs prior to and without prejudice of the final determination by its customs authority of the tariffs, taxes and charges that are applicable. (1)
3. Each Party shall ensure, insofar as possible, that its competent authorities involved in border control or goods export and import, cooperate to facilitate trade by coordinating the requirements of information and documents, establishing a single location and time for physical and documentary verification, among other tasks.
4. The Parties shall establish mechanisms for consultation with the commercial and business community to promote greater cooperation between them.
Article 5.5. Automation
Each Party shall endeavor to use information technology that expedites the procedures for the clearance of goods. When deciding on the information technology to be used for this purpose, each Party:
(a) Shall endeavor to use international standards;
(b) Shall make electronic systems accessible to customs users;
(c) Shall provide for the electronic submission and processing of information and data before the arrival of shipment, in order to enable the clearance of goods upon arrival;
(d) Shall employ electronic or automated systems for risk analysis and management;
(e) Shall work on the interoperability of electronic systems in order to facilitate the exchange of international trade data, and
(f) Shall work towards developing a set of common data elements and processes in accordance with the Customs Data Model of the World Customs Organization (hereinafter referred to as "WCO") and related WCO recommendations and guidelines.
Article 5.6. Risk Administration or Management
1. Each Party shall adopt or maintain risk administration or management systems in order to enable its customs authority to focus its inspection activities on high risk goods and to simplify the clearance and movement of low risk goods, respecting the confidential nature of the information obtained through such activities.
2. When applying risk administration or management, each Party shall inspect the imported goods on the basis of appropriate selectivity criteria with the help of non-intrusive inspection instruments, in order to reduce the physical inspection of all goods entering its territory.
3. The Parties shall adopt cooperation programs in order to strengthen the risk administration or management system that are based on best practices established between them.
Article 5.7. Express Shipments
Each Party shall adopt or maintain expedited customs procedures for express shipments, while, at the same time, allowing for an appropriate control and selection of goods. Such procedures shall:
(a) Provide a separate and expedited customs procedure;
(b) Provide for the submission and processing of the necessary information, under its law, for goods clearance before its arrival;
(c) Allow the submission of a single manifest covering all goods contained in a shipment transported by express service, as far as possible, through electronic means;
(d) Provide, to the extent possible, for clearance of certain goods with a minimum of documentation;
(e) Provide, under normal circumstances, for clearance of express shipments within six hours after submission of the necessary customs documents, provided that the shipment has arrived; and
(f) Provide that, under normal circumstances, there shall not be customs duties imposed on express shipments, up to the amount determined under the law of each of the Parties (2).
Article 5.8. Authorized Economic Operator
1. The customs administrations of the Parties shall promote the implementation and strengthening of the Authorized Economic Operator programs (hereinafter referred to as "AEO") in accordance with the WTO Framework of Standards to Secure and Facilitate Global Trade (hereinafter referred to as "Regulatory Framework SAFE").
2. The customs administrations of the Parties shall promote and work in the signing of mutual recognition agreements (hereinafter referred to as "MRA") on AEO programs of the Parties.
3. For the purposes of this Article, the Parties establish Annex 5.8.
Article 5.9. Single Window for Foreign Trade
The Parties shall implement and promote its Single Windows for Foreign Trade (hereinafter referred to as "Single Windows") to expedite and improve trade, and shall ensure the interoperability between them in order to exchange information to expedite trade and allow the Parties, inter alia, to verify the information on the foreign trade operations carried out. For this purpose, the Parties establish Annex 5.9.
Article 5.10. Review and Appeal
Each Party shall ensure in respect of administrative acts in customs matters that any person subject to such acts on its territory have access to:
(a) An independent administrative review of the instance or official who has issued the administrative act in accordance with its legislation, and
(b) A judicial review of such administrative acts.
Article 5.11. Sanctions
Each Party shall adopt or maintain measures that allow the imposition of civil or administrative sanctions and, where appropriate, criminal sanctions for the violation of its laws and regulations relating to entry, exit or transit of goods, including, among others, those governing tariff classification, customs valuation, rules of origin and preferential tariff treatment applications under this Additional Protocol.
Article 5.12. Advance Rulings
1. Each Party shall issue in writing, prior to the importation of goods into its territory, an advance ruling at the written request of an importer in its territory, or an exporter or producer in the territory of another Party in respect of:
(a) Tariff classification;
(b) Whether a good qualifies as originating in accordance with Chapter 4 (Rules of Origin and Procedures in Connection with Origin);
(c) Application of customs valuation criteria, under the Agreement on Customs Valuation, andâ
(d) Other matters as the Parties may agree.
2. Each Party shall adopt or maintain procedures for issuing advance rulings that include:
(a) Information reasonably required in order to process the application;
(b) The power of the authority to request additional information from the applicant during assessment of the application, and
(c) The duty of the authority to issue a complete, founded and justified advance ruling;
3. Each Party shall issue an advance ruling within the term provided by its law, which may not exceed 150 days from the date that the applicant has submitted all the information required by the Party, including, if the party so requests, a sample of the goods for which the applicant is requesting an advance ruling. In issuing an advance ruling, the Party will consider the facts and circumstances that the applicant has submitted.
4. Advance rulings shall come into effect from the date of issuance, or such later date specified in the decision and shall remain valid for at least three years, provided that the facts or circumstances on which the decision is based have not changed.
3 An importer, exporter or producer may request an advance ruling through a duly authorized representative in accordance with the law of the Party to whom such resolution is requested.
4 The customs authority shall render a decision only on the valuation method to be applied for determining the customs value under the provisions of the Agreement on Customs Valuation; this means that the decision will not determine the amount to be declared for customs valuation concept.
5. The advance ruling may be modified or revoked, automatically or at request of the holder, as appropriate, in the following cases:
(a) When the advance ruling is based on an error;
(b) When the circumstances or facts supporting the advance ruling change;
(c) To comply with an administrative or judicial decision, or adjust to a change in the law of the Party that issued the advance ruling.
6. The party issuing the advance ruling may modify or revoke it and shall notify the applicant of the measure adopted.
7. The modification or revocation of an advance ruling shall not be applied with retroactive effect, except in the case that the person to whom it has been issued had submitted incorrect or false information.
8. A Party may refuse to issue an advance ruling if the facts and circumstances which form the basis of the advance ruling are under review in administrative or judicial proceedings. In such cases, the Party shall notify the applicant in writing, stating the reasons in fact and in law on which the decision is based.
9. Subject to confidentiality requirements provided in its legislation, each Party shall make its advance rulings available to the public, including on Internet.
10. If an applicant provides false information or omit relevant facts or circumstances, in connection with the advance ruling, or fails to act in accordance with the terms and conditions of such ruling, the Party issuing the ruling may apply appropriate measures, including civil, criminal, and administrative actions, monetary penalties, or other sanctions.
Section B. Cooperation and Mutual Assistance In Customs Matters
Article 5.13. Scope
1. The provisions of this Section shall apply only to the cooperation and mutual assistance in customs matters between the Parties.
2. The Parties, through their customs administrations should provide cooperation and mutual assistance to each other in order to ensure proper implementation of customs legislation, facilitation of customs procedures, and prevention, investigation and punishment of operations in breach of customs legislation.
3. Technical cooperation includes the exchange of information, legislation, best practices in customs matters, as well as the exchange of experiences, training and any kind of technical support or material suitable for strengthening the customs management of the Parties.
4. Mutual assistance includes the exchange of information and other provisions under this Section, aimed at the prevention, investigation and punishment of operations in breach of customs legislation.
5. The information provided shall be used solely for the purposes set out in this Section, including the cases where it is required under administrative, judicial or investigative processes. The information may also be used for other purposes or by other authorities, only if the requested party expressly authorizes it in writing
6. The assistance for the recovery of duties, taxes or fines is not covered by this Section.
7. The Parties shall cooperate to strengthen the capacity of each customs administration to enforce its regulations governing importations. In addition, the customs administrations shall establish and maintain other channels of communication in order to facilitate the secure and rapid exchange of information and improve the coordination in connection with matters in this Section
Article 5.14. Customs Cooperation
1. Customs administrations recognize that customs cooperation between them is essential to facilitate trade. To this end, they will cooperate to achieve the enforcement of their respective customs laws, as well as the provisions related to compliance in this Chapter.
2. A customs administration shall provide to the other customs administrations technical assistance and advice in order to improve the implementation of customs valuation and risk management standards, facilitate the implementation of standards of international supply chains, simplify and expedite customs procedures for the timely and efficient clearance of goods, increase the technical skills of staff and improve the use of technologies that may lead to better compliance with the laws or regulations of a Party governing the entry of goods into its territory.
3. The Parties, in accordance with its laws and subject to the available resources will promote and facilitate cooperation and assistance between their respective customs administrations in order to ensure the application of customs legislation, and in particular to:
(a) Organize joint training programs on issues related to the trade facilitation and customs matters specific of this Chapter;
(b) Contribute to the collection and exchange of statistics related to import and export of goods, the harmonization of documentation used in trade and the standardization of data;
(c) Prevent operations in breach of customs legislation, and
(d) Promote mutual understanding of the laws, procedures, and best practices of each of the Parties.
4. The customs authorities shall cooperate in:
(a) The training, among others, for the development of specialized skills in their customs officials;
(b) The exchange of technical information related to customs legislation procedures and new technologies applied by the Parties;
(c) The harmonization of laboratory methods in customs and the exchange of information and personnel between customs laboratories;
(d) The fields of research, development and testing of new customs procedures;
(e) The development of effective mechanisms for communication with foreign trade operators and the academia;
(f) Any difference related to the tariff classification of goods, and