a) the commercial importation of a good whose customs value does not exceed US$1,000 or its equivalent in national currency or such greater amount as the Party may establish, but may require that the invoice contain or be accompanied by a declaration by the importer or exporter that the good qualifies as originating;
b) the importation for non-commercial purposes of a good the customs value of which does not exceed US$1,000 or its equivalent in national currency or such greater amount as the Party may establish; or
c) the importation of a good for which the importing Party has exempted from the requirement to present the certificate of origin.
Article 5-06. Accounting Records.
Each Party shall provide that:
a) its exporter or producer who completes and signs a certificate or declaration of origin retains, for a period of at least five years after the date of validation of the certificate or signature of the declaration, all records and documents relating to the origin of the good, including those relating to:
(i) the acquisition, costs, value and payment of the good to be exported from its territory,
(ii) the acquisition, costs, value and payment of all materials, including indirect materials, used in the production of the good being exported from its territory, and
(iii) the production of the good in the form in which it is exported from its territory; and
b) an importer claiming preferential tariff treatment for a good being imported into its territory from the territory of the other Party shall retain for a period of at least five years from the date of importation the certificate of origin and all other import documentation required by the importing Party.
Article 5-07. Operations Invoiced by Third Party Operators.
Originating goods shall maintain such character, even when invoiced by third party operators, provided they comply with the provisions of this Chapter and Chapter IV (Origin Regime).
Article 5-08. Procedures to Verify Origin.
1. The importing Party may request from the exporting Party information regarding the origin of a good, through its customs authority. For such purpose, the competent authority of the exporting Party shall provide the requested information within a term not exceeding 120 days, counted from the date of receipt of the respective request. In cases where the requested information is not provided within such period, the customs authority of the importing Party may deny preferential tariff treatment.
2. In determining whether a good being imported into the territory of a Party from the territory of the other Party with preferential tariff treatment qualifies as originating, each Party may, through its customs authority, verify the origin of the good by:
a) written questionnaires addressed to exporters or producers in the territory of the other Party;
b) verification visits to an exporter or producer in the territory of the other Party, for the purpose of examining the records and documents evidencing compliance with the rules of origin in accordance with Article 5-06a), and inspecting the facilities used in the production of the good and, if applicable, those used in the production of the materials; or
c) other procedures agreed upon by the Parties.
The provisions of this paragraph shall be without prejudice to the powers of review of the importing Party over its own importers, exporters or producers.
3. When the exporter or producer receives a questionnaire pursuant to paragraph 2, subparagraph a), it shall respond and return that questionnaire within 30 days. During that period the exporter or producer shall be granted an extension, which shall not exceed 30 days, provided that he requests it in writing to the importing Party that is carrying out the verification. Notwithstanding the foregoing, the customs authority of the importing Party may grant an extension of more than 30 days if it deems it necessary. This request shall not result in the denial of preferential tariff treatment.
4. In the event that the exporter or producer fails to return the questionnaire referred to in paragraph 2(a} within the time limit set forth in paragraph 3, the importing Party may deny preferential tariff treatment and the good subject to verification of origin shall be considered a non-originating good and the certificate of origin covering the good shall be considered invalid.
5. Before carrying out a verification visit pursuant to paragraph 2(b), the importing Party shall be obliged, through its customs authority, to notify in writing its intention to carry out the visit. The notification shall be sent to the exporter or producer to be visited, to the competent authority of the Party in whose territory the visit is to take place and, if so requested by the latter, to the embassy of that Party in the territory of the importing Party. The customs authority of the importing Party shall obtain the written consent of the exporter or producer to be visited.
6. The notification referred to in paragraph 5 shall contain:
a) the identification of the notifying customs authority;
b) the name of the exporter or producer to be visited;
c) the date and place of the proposed verification visit;
d) the purpose and scope of the proposed verification visit, making specific mention of the good or goods, as well as the certificates of origin to be verified;
e) the names and positions of the officials who will carry out the verification visit; and
f) the legal basis for the verification visit.
7. Any modification in the number, name or position of the officials referred to in paragraph 6 (e) shall be communicated in writing to the exporter or producer and to the competent authority of the exporting Party prior to the verification visit. Any modification of the information referred to in paragraph 6 (a), (b), (c) and (f) shall be notified in accordance with paragraph 5.
8. If within 30 days of receiving notice of the proposed verification visit under paragraph 5, the exporter or producer does not consent in writing to the verification visit, the importing Party may deny preferential tariff treatment to the good or goods that would have been the subject of the verification visit and the good subject to verification of origin shall be considered a non-originating good and the certificate of origin covering the good shall be considered invalid.
9. Each Party shall provide that, where its competent authority receives a notification pursuant to paragraph 5, it may, within 15 days from the date of receipt of the notification, postpone the proposed verification visit for a period not exceeding 60 days from the date on which the notification was received, or for such longer period as the Parties may agree, by so informing the exporter or producer in writing, as appropriate.
10. A Party may not deny preferential tariff treatment solely on the basis of the postponement of the verification visit, as provided in paragraph 9.
11. Each Party shall allow the exporter or producer, whose good or goods are the subject of a verification visit, to designate two observers to be present during the visit, provided that they intervene only in that capacity. Failure to designate observers by the exporter or producer shall not result in postponement of the visit.
12. For the purposes of verifying compliance with the regional value content requirements, the calculation of the de minimis value, or any other measure contained in Chapter IV (Origin Regime) through the customs authority, the customs authority shall proceed in accordance with the generally accepted accounting principles applied in the territory of the Party from which the good has been exported.
13. The customs authority of the importing Party shall draw up a record of the visit containing the facts found by it. Said record may be signed by the producer or exporter and the designated observers. The exporter or producer may record his disagreement with the findings at the bottom of the record. The refusal to sign the minutes by the exporter, the producer or the observers does not invalidate the same, and such refusal must be recorded in the minutes , if any
14. Upon completion of the verification, the customs authority shall provide a written determination to the exporter or producer whose good or goods have been subject to the verification, as to whether or not the good or goods qualify as originating, which shall include findings of fact and the legal basis for the determination.
15. When the verification carried out by a Party establishes that the exporter or producer has certified or declared more than once, falsely or unfoundedly, that a good qualifies as originating, the importing Party may suspend the preferential tariff treatment to the identical goods exported or produced by that person, until that person proves that it complies with the provisions of Chapter IV (Rules of Origin).
16. Each Party shall provide that, where its customs authority determines that a good imported into its territory does not qualify as originating according to the tariff classification or the value applied by the Party to one or more materials used in the production of the good, and this differs from the tariff classification or the value applied to the materials by the Party from whose territory the good was exported, the determination of the importing Party shall not take effect until it notifies in writing the importer of the good, as well as the person who has completed and signed the certificate of origin covering the good and the competent authority of the exporting Party.
17. The importing Party shall not apply the ruling under paragraph 16 to an importation made before the date on which the ruling takes effect, provided that:
a) the customs authority into whose territory the good has been imported has issued an advance ruling pursuant to article 5-10, or any other ruling on the tariff classification or value of materials, on which a person is entitled to rely; and
b) the aforementioned resolutions are prior to the notification of the initiation of the verification of origin.
18. Where a Party denies preferential tariff treatment to a good pursuant to a decision taken under paragraph 16, that Party shall postpone the effective date of the denial for a period not to exceed ninety days, provided that the importer of the good, or the exporter or producer who has completed and signed the certificate or declaration of origin covering the good, establishes that he has relied in good faith, to his detriment, on the tariff classification or value applied to the materials by the customs authority of the exporting Party.
Article 5-09. Confidentiality.
1. Each Party shall, in accordance with its laws, maintain the confidentiality of information of that nature obtained pursuant to this Chapter and shall protect it from disclosure in a manner that would prejudice the person providing it.
2. Confidential information obtained under this chapter may only be disclosed to the authorities responsible for the administration and enforcement of rulings of origin and customs or tax matters, as appropriate.
Article 5-10. Anticipated Resolutions.
1. Each Party shall provide that, through its customs authority, advance written rulings shall be issued expeditiously prior to the importation of a good into its territory. Advance rulings shall be issued by the customs authority of the territory of the importing Party to its importer or to the exporter or producer in the territory of the other Party, based on the facts and circumstances stated by them, in relation to:
a) whether a good qualifies as originating, in accordance with Chapter IV (Origin Regime};
b) whether the non-originating materials used in the production of a good comply with the corresponding change in tariff classification set out in Annex 4-03 (Specific Rules of Origin);
c) if the good complies with the regional content value established in Chapter IV (Origin Regime);
d) whether the method applied by the exporter or producer in the territory of the other Party, in accordance with the principles of the Customs Valuation Agreement, for the calculation of the transaction value of the good or materials used in the production of a good, in respect of which an advance ruling is requested, is adequate to determine whether the good meets the regional value content under Chapter IV (Rules of Origin);
e) whether the method applied by the exporter or producer in the territory of the other Party for the reasonable allocation of costs, in accordance with the Uniform Regulations for the calculation of the net cost of a good or the value of an intermediate material, is adequate to determine whether the good complies with the regional value content under the referred chapter;
f) whether a good that re-enters its territory after having been exported from its territory to the territory of the other Party for repair or alteration qualifies for duty-free treatment pursuant to Article 3-09 (Goods re-imported or re-exported after having been repaired or altered); and
g) such other matters as the Parties may agree.
2. Each Party shall adopt or maintain procedures for the issuance of advance rulings, including:
a) information reasonably required to process the request;
b) the power of its customs authority to request additional information from the person requesting the advance ruling at any time during the process of evaluating the request;
c) the obligation of the customs authority to issue the advance ruling once it has obtained all the necessary information from the person requesting it; and
d) the obligation of the customs authority to issue the advance ruling in a complete, founded and motivated manner.
3. Each Party shall apply advance rulings to imports into its territory from the date of issuance of the ruling, or such later date as it may specify, unless the advance ruling is modified or revoked in accordance with paragraph 5.
4. Each Party shall accord to any person requesting an advance ruling the same treatment, interpretation and application of the provisions of Chapter IV (Rules of Origin) relating to the determination of origin as it has accorded to any other person to whom it has issued an advance ruling, where the facts and circumstances are identical in all material respects.
5. The advance ruling may be modified or revoked in the following cases: a) when the advance ruling was based on an error:
(i) in fact,
(ii) in the tariff classification of the good or materials that are the subject of the resolution,
(iii) in the application of the regional value content under Chapter IV (Rules of Origin), or
(iv) in the application of the rules for determining whether a good, which re-enters its territory after it has been exported from its territory to the territory of the other Party for the purpose of repair or alteration, qualifies for duty-free treatment under Article 3-07 (Goods re-imported or re-exported after having been repaired or altered);
b) where the ruling is not in accordance with an interpretation that the Parties have agreed upon with respect to Chapter Ill (National Treatment and Market Access for Goods) or Chapter IV (Rules of Origin);
c) when the circumstances or facts on which it is based change;
d) in order to comply with a modification to Chapter III (National Treatment and Market Access), Chapter IV (Rules of Origin), this Chapter, or the Uniform Regulations; or
e) in order to comply with an administrative or judicial decision or to conform to a change in the law of the Party that issued the advance ruling.
6. Each Party shall provide that any modification or revocation of an advance ruling shall take effect on the date on which it is issued or on a later date specified therein, and may not be applied to imports of a good made before those dates, unless the person to whom it was issued has not acted in accordance with its terms and conditions.
7. Each Party shall provide that, when examining the regional value content of a good for which an advance ruling has been issued, its customs authority shall assess whether:
a) the exporter or producer complies with the terms and conditions of the advance ruling;
b) the exporter's or producer's operations are consistent with the circumstances and substantial facts on which the determination is based; and
c) the supporting data and calculations used in the application of the criterion or method for calculating the value or assigning the cost are correct in all material respects.
8. Each Party shall provide that, where its customs authority determines that any of the requirements set out in paragraph 7 have not been complied with, such authority may modify or revoke the advance ruling, as appropriate.
9. Each Party shall provide that, where its customs authority decides that the advance ruling has been based on incorrect information, the person to whom the advance ruling has been issued shall not be penalized, if he demonstrates that he acted with reasonable care and in good faith in disclosing the facts and circumstances giving rise to the advance ruling, without prejudice to the payment of the corresponding customs duties.
10. Each Party shall provide that, where an advance ruling is issued to a person who has falsely stated or omitted material facts or circumstances on which the advance ruling is based, or has not acted in accordance with the terms and conditions of the advance ruling, the customs authority issuing the advance ruling may apply such measures as the circumstances warrant.
11. The Parties shall provide that the holder of an advance ruling may use it only as long as the facts or circumstances on the basis of which it was issued continue to exist. In this case, the holder of the ruling may submit the information necessary for the issuing authority to proceed as provided in paragraph 5.
12. A good that is subject to a verification of origin or to any instance of review or challenge in the territory of any of the Parties shall not be subject to an advance ruling.
Article 5-11. Penalties.
1. Each Party shall establish or maintain customs, administrative, civil or criminal penalties for violations of its laws and regulations related to the provisions of this Chapter.
2. Nothing in Articles 5-03(1)(d), 5-03(2), 5-04(2) or 5-08(10) shall be construed to prevent a Party from applying measures as circumstances warrant.
Article 5-12. Review and Challenge.
1. Each Party shall grant the same rights of review and challenge of determinations of origin and advance rulings provided to its importers, to exporters or producers of the other Party who:
a) complete and sign a certificate or declaration of origin covering a good that has been the subject of a determination of origin under Article 5-08(14) ; or
b) have received an advance ruling in accordance with Article 5-10.
2. The rights referred to in paragraph 1 include access to at least one instance of administrative review, independent of the official or agency responsible for the determination or advance ruling subject to review, and access to an instance of judicial or administrative review of the determination or decision made in the final instance of administrative review, in accordance with the laws of each Party.
Article 5-13. Uniform Regulations.
1. The Parties shall establish and implement, through their respective laws and regulations, on the date of entry into force of this Agreement and at any time thereafter, by express agreement, Uniform Regulations concerning the interpretation, application and administration of Chapter III (National Treatment and Market Access for Goods), Chapter IV (Rules of Origin), this Chapter and such other matters as the Parties may agree.
2. Each Party shall implement any modification or addition to the Uniform Regulations no later than 180 days after the respective agreement between the Parties, or within such other period as the Parties may agree.
Article 5-14. Cooperation.
1. Each Party shall notify the other Party of the following measures, rulings or determinations including, to the extent practicable, those in the process of being implemented:
a) a determination of origin issued as a result of a verification of origin visit carried out pursuant to article 5-08, once the review and challenge procedures referred to in article 5-12 have been exhausted;
b) a determination of origin that the Party considers contrary to a determination made by the customs authority of the other Party on tariff classification or the value of a good, or of the materials used in the production of a good, or the reasonable allocation of costs when calculating the net cost of a good subject to a determination of origin;
c) a measure that establishes or significantly changes an administrative policy and that could affect future determinations of origin; and
d) an advance ruling or its modification, in accordance with article 5-10.
2. The Parties shall cooperate:
a) in the application of their respective customs laws or regulations for the application of this Agreement, as well as any mutual assistance customs agreement or other customs agreement to which they are a Party;
b) to the extent possible and for the purpose of facilitating trade between their territories, in customs matters such as those related to the collection and exchange of statistics on the import and export of goods, the harmonization of documentation used in trade, the uniformity of data elements, the acceptance of an international syntax of data and the exchange of information;
c) as far as possible, in the filing and forwarding of customs documentation;
d) to the extent possible, in the verification of the origin of a good, for which purpose, the competent authority of the importing Party may request the customs authority of the other Party to carry out in its territory certain operations or procedures conducive to such purpose, issuing the respective report; and
e) to seek some mechanism for the purpose of detecting and preventing the illicit transshipment of goods originating from a non-Party.
Annex 5-01. Customs Authority
For the purposes of this Chapter, the term "customs authorityâ shall mean the authority which, under the legislation of each Party, is responsible for the administration of its customs laws and regulations:
a) in the case of Mexico, the Ministry of Finance and Public Credit and the Tax Administration Service, or their successors; and
b) in the case of Uruguay, the National Directorate of Customs of the Ministry of Economy and Finance, or its successor.
Chapter VI. SAFEGUARDS
Article 6-01. Definitions.
For the purposes of this Chapter, the following definitions shall apply:
threat of serious injury: the clear imminence of serious injury. A determination of the existence of a threat of serious injury shall be based on facts and not merely on allegation, conjecture or remote possibility;
competent authority: the "competent authority! of a Party, as defined in Annex 6-01 (Competent Authority);
directly competing product or commodity: that which, while not identical or similar to the one being compared, has the same distribution channels, is marketed in the same market and is purchased by a similar group of consumers;
similar merchandise or product: the identical one, which is that which is the same in all aspects as the product in question, or that which, although not the same in all aspects, has the same characteristics and composition as the product in question.
The product is similar, which allows it to fulfill the same functions and to be commercially interchangeable with the merchandise or product to which it is compared;
serious injury: a significant overall impairment of the condition of a particular domestic industry; transition period: shall include the relief period applicable to each good, as provided for in the relief program; safeguard measure: a global or bilateral safeguard measure established in accordance with this Chapter; and
domestic industry: the producers as a whole of the like or directly competitive good or product operating within the territory of a Party or those whose collective output of the like or directly competitive product constitutes a major proportion of the total domestic production of those products in a Party. Such major proportion may not be less than 50 per cent.
Article 6-02. General Provisions.
The Parties may apply a regime of safeguards to imports of goods made under the Duty-Free Program, the application of which shall be based on clear, strict and time-bound criteria. The Parties may adopt bilateral or global safeguard measures.
Article 6-03. Global Safeguards.
The Parties retain their rights and obligations to apply global safeguard measures under Article XIX of the GATT 1994 and the Agreement on Safeguards that forms part of the WTO Agreement, except for those relating to compensation or retaliation and exclusion of a measure, insofar as they are inconsistent with the provisions of this Chapter.
Article 6-04. Criteria for the Adoption of a Global Safeguard Measure.
1. When a Party decides to adopt an overall safeguard measure, it may apply it to the goods of the other Party only when it determines that imports of such goods, considered individually, represent a substantial part of total imports and contribute importantly to the serious injury or threat of serious injury to the importing Party.
For the purposes of paragraph 1, the following criteria shall be taken into account:
a) Imports of goods from the other Party shall be deemed to be substantial if. during the three (3) years immediately preceding the initiation of the investigation, they are included in the imports of the five (5) principal supplier countries of that good in the importing Party.
b) Imports of goods from the other Party shall not be considered to contribute materially to serious injury or threat of serious injury if their rate of growth during the period in which the increase in such imports occurred is substantially less than the rate of growth of total imports from all sources during the same period.
2. The Party that applies the overall safeguard measure, and initially has excluded from it a good of the other Party, shall have the right to include it subsequently when the competent investigating authority determines that a significant increase in imports of such good substantially reduces the effectiveness of the measure. In this regard, it shall be considered to implement a greater quota of imports than that referred to in paragraph 3 of this Article, provided that it does not substantially reduce the effectiveness of the measure.
3. The preference applicable at the time of the adoption of the global safeguard measure shall be maintained for a quota of imports, which shall be the average of the imports made in the three (3) years immediately preceding the period in which the existence of serious injury or threat of serious injury was determined.
Article 6-05. Bilateral Safeguards.
1. Each Party may apply, on an exceptional basis and under the conditions set out in this Chapter during the transition period, bilateral safeguard measures on the importation of goods benefiting from this Agreement, meaning the total or partial suspension of compliance with tariff preference commitments.
2. Bilateral safeguard measures applied pursuant to this Article shall consist of the suspension or reduction of the tariff preference. The preference applicable at the time of the adoption of the bilateral safeguard measure shall be maintained for a quota of imports, which shall be the average of the imports made in the three (3) years immediately preceding the period in which the existence of serious injury or threat of serious injury was determined.
3. Upon termination of the period of application of the bilateral safeguard measure, the preference negotiated in this Agreement shall be reestablished for the merchandise subject to such measure.
4. Bilateral safeguard measures shall have an initial maximum duration of 1 (one) year, including the period during which the provisional measures would have been in force. They may be extended for an additional year when it is determined, in accordance with the provisions of this Chapter, that they continue to be necessary to remedy serious injury or threat of serious injury and that there is evidence that the domestic industry is in the process of adjustment.
5. The total period of application of a bilateral safeguard measure shall not exceed two (2) years. The Parties shall not apply, more than once, a bilateral safeguard measure against any particular good originating in another Party, unless expressly authorized by the Commission.
Article 6-06. Provisional Bilateral Safeguard.
1. In critical circumstances, where any delay would cause damage which would be difficult to repair, the Parties may adopt a provisional bilateral safeguard measure pursuant to a preliminary determination that there is clear evidence that increased subject imports have caused or are threatening to cause serious injury.
2. Immediately after the adoption of the provisional bilateral safeguard measure, it shall be notified and consultations shall be held, in accordance with the provisions of Articles 6-17 and 6-18.
3. The duration of the provisional bilateral safeguard measure shall not exceed 200 days and shall adopt the same form provided for definitive measures, in accordance with the provisions of Article 6-05(2). If in the course of the investigation it is determined that the increased imports subject to preference have not caused or threatened to cause serious injury, the amount collected for provisional measures shall be promptly reimbursed, with the corresponding fiscal interest, or the guarantees that have been presented for such concept shall be released.
Article 6-07. Procedures Relating to the Application of Global or Bilateral Safeguards Measures.
1. Each Party shall establish or maintain equitable, transparent and effective procedures for the application of safeguard measures, in accordance with the provisions of this Chapter.
2. The Parties shall ensure the uniform, impartial and reasonable application of their laws, regulations, rulings and determinations governing all procedures for the adoption of safeguard measures under this Chapter.
Article 6-08. Investigation.
1. The Parties shall apply a safeguard measure under this Chapter only if: has been determined, as a result of an investigation, that imports of a like or directly competitive good originating in the other Party have increased in such increased quantities, in absolute and relative terms, and are made under such conditions as to cause or threaten to cause serious injury.
2. The Parties shall apply safeguard measures only to the extent necessary to prevent or remedy serious injury and to facilitate adjustment. In no case shall the increase in tariff determined in any case exceed the lesser of the most-favored-nation tariff for that good at the time the measure is taken or the most-favored-nation tariff for that good on the day before the entry into force of this Agreement.
3. In an investigation under this Chapter, in determining whether increased subject imports have caused or are threatening to cause serious injury, the Parties shall evaluate all relevant factors of an objective and quantifiable nature having a bearing on the situation of the domestic industry, in particular the following:
a) the relationship between the imports subject to preference in question and those not subject to preference of any origin, as well as between the increases in such imports;
b) the share of the domestic market absorbed by increasing imports; and
c) changes in the level of sales, production, productivity, capacity utilization, profit or loss and employment.