Article 2.17. Duty-Free Entry of Commercial Samples of Negligible Value and Printed Advertising Materials
Each Party, in accordance with its respective domestic law, shall grant duty-free entry to commercial samples of negligible value, and to printed advertising materials, imported from the territory of the other Party, regardless of their origin, but may require that:
(a) such samples be imported solely for the solicitation of orders for goods or services provided from the territory of the other Party or a non-Party; or
(b) such advertising materials be imported in packets, that each contain no more
than one copy of each such material, and that neither the materials nor the packets form part of a larger consignment.
Article 2.18. Subcommittee on Trade In Goods
1. The Parties hereby establish a Subcommittee on Trade in Goods under the Joint Committee comprising representatives of each Party.
2. The Subcommittee shall meet, in person or by any other technological means as determined by the Parties, at such times as agreed by the Parties and when they deem it appropriate, to consider matters arising under this Chapter.
3. The functions of the Subcommittee shall include, inter alia:
(a) monitoring and reviewing the implementation and administration of this Chapter, and making report and recommendation, if appropriate;
(b) promoting trade in goods between the Parties, including through consultations on accelerating or improving the scope of preferential treatment or tariff elimination under this Agreement and other issues as appropriate;
(c) addressing barriers to trade in goods between the parties including those related to the application of non-tariff measures which may restrict trade in goods between the Parties and, if appropriate, referring such matters to the Joint Committee for its consideration;
(d) providing advice and recommendations to the Joint Committee on technical cooperation needs regarding Trade in Goods matters;
(e) reviewing the amendments to the Harmonized System (HS) to ensure that each Partyâs obligations under this Agreement are not altered, and consulting to resolve any conflicts between such amendments to the Harmonized System (HS) and Annex 2B (Elimination of Customs Duties) and national nomenclatures;
(f) consulting on and endeavoring to resolve any difference that may arise among the Parties on matters related to the classification of goods under the Harmonized System (HS), including adoption and review of transposition methodologies and guidelines;
(g) reviewing data on trade in goods in relation the implementation of this Chapter;
(h) assessing matters that relate to trade in goods and undertaking any additional work that the Joint Committee may assign to it; and
(i) reviewing and monitoring any other matter related to the implementation of this Chapter.
Chapter 3. RULES OF ORIGIN
Article 3.1. Definitions
For the purposes of this Chapter:
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, inter alia, regular stocking, feeding, and protection from predators;
competent authority means:
(a) for Costa Rica, the Costa Rican Foreign Trade Corporation (Promotora del Comercio Exterior de Costa Rica, PROCOMER), or its successor; and
(b) for UAE, the Ministry of Economy, or its successor;
consignment means goods which are either sent simultaneously from one exporter to one consignee or covered by a single transport document covering their shipment from the exporter to the consignee or, in the absence of such a document, by a single invoice;
customs authority means:
(a) for Costa Rica, the National Customs Service (Servicio Nacional de Aduanas); and
(b) for UAE, the Federal Authority for Identity, Citizenship, Customs & Port Security (ICP);
customs value means the value as determined in accordance with the Agreement on implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (WTO Agreement on Customs Valuation);
generally accepted accounting principles means the recognised consensus or substantial authoritative support in the territory of 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 principles may encompass broad guidelines of general application, as well as detailed standards, practices, and procedures;
good means any merchandise, article, material that is, among others, obtained by growing,
raising, mining, harvesting, fishing, aquaculture, trapping, hunting, extracting or manufacturing, even if it is intended for later use in another manufacturing operation;
Harmonized System ("HS") means the Harmonized Commodity Description and Coding System, including its general rules of interpretation and legal notes, as adopted and implemented by the Parties in their respective national laws;
manufacture means any kind of working or processing, including assembly or specific operations;
material means a good that is used in the production of another good, including any ingredient, raw material, component or part;
non-originating goods / non-originating materials mean goods or materials that does not qualify as originating under this Chapter and (or) goods or materials of undetermined origin;
originating goods / originating materials mean goods or materials that qualify as originating under this Chapter;
production means growing, raising, mining, harvesting, fishing, aquaculture, trapping, hunting, manufacturing, processing, assembling, among others.
Section A. Origin Determination
Article 3.2. Originating Goods
1. For the purposes of implementing this Agreement, goods shall be considered as originating in territory of a Party, if:
(a) goods are wholly obtained or produced in territory of a Party, according to Article 3.3;
(b) goods are not wholly obtained or produced in territory of a Party, provided that the good has undergone sufficient working or processing according to Article 3.4; or
(c) goods produced entirely in territory ofa Party, exclusively from materials that qualify as originating pursuant to the provisions of this Chapter.
2. In each case provided in paragraph 1, the goods satisfied all other applicable requirements of this Chapter.
Article 3.3. Wholly Obtained or Produced Goods
For the purposes of Article 3.2.1. (a), the following goods shall be deemed to be wholly obtained or produced in the territory of a Party:
(a) plants and plants goods grown, gathered and harvested in the territory of a Party;
(b) live animals born and raised in the territory of a Party;
(c) goods obtained from live animals in the territory of a Party;
(d) mineral goods and natural resources extracted or taken from the territory of a Party;
(e) goods obtained from hunting, trapping, collecting, capturing, fishing or aquaculture conducted in the territory of a Party;
(f) goods of sea fishing and other marine goods taken from outside the territory of a Party by a vessel and/or produced or obtained by a factory ship registered, recorded, or licensed with a Party and flying its flag;
(g) goods, other than goods of sea fishing and other marine goods, taken or extracted from the seabed or the subsoil outside the territorial waters of a Party by a Party or a person of a Party, provided that such a Party or such a person of a Party has the right to exploit such seabed, or subsoil in accordance to international law and its legislation;
(h) raw materials recovered from used goods collected in the territory of a Party;
(i) wastes or scraps resulting from manufacturing or processing operations conducted in the territory of a Party;
(j) used goods collected in the territory of a Party, provided that such goods are fit only for recovery of raw materials; and
(k) goods produced or obtained in the territory of a Party exclusively from goods referred to in subparagraphs (a) through (j) of this Article.
Article 3.4. Sufficient Working or Processing
1. For the purposes of Article 3.2.1. (b), a good shall be considered to have undergone sufficient working or processing and shall deemed to be originating if the good satisfy any of the following:
(a) a Change in Tariff Heading (CTH), which means that all non-originating materials used in the production of the good have undergone a change in HS tariff classification at the 4-digit level; or
(b) a Qualifying Value Content (QVC) not less than 35% when calculated on the basis of the Ex-Works value.
2. Notwithstanding paragraph 1, if the good falls within the classifications included in the Product Specific Rules (PSR) list in Annex 3A (Product Specific Rules), then the good shall satisfy the specific rule detailed therein.
3. For the purposes of paragraphs 1 and 2, the QVC shall be calculated as follows:
QVC = Ex Works Value - V.N.M / Ex Works Value * 100
where:
QVC is the qualifying value content of a good expressed as a percentage;
Ex-Works Value is the price paid for the good Ex-Works to the manufacturer in the Parties in whose undertaking the last working or processing is carried out, provided the price includes the value of all the materials used, minus any internal taxes which are, or may be, repaid when the good obtained is exported;
V.N.M is the customs value of the non-originating materials at the time of importation, inclusive freight and insurance costs incurred in transporting the material to the importation port or place in the territory of the Party where the producer of the good is located or the earliest ascertained price paid or payable in the Party where the production of the goods takes place for all non-originating materials that are acquired by the producer in the production of the good. When the producer of a good acquires non-originating materials within that Party, the value of such materials shall not include freight, insurance, packing costs and any other costs incurred in transporting the material from the supplier's warehouse to the producerâs location.
Article 3.5. Intermediate Materials
When an originating intermediate material is used in the production of a good, no account shall be taken of the non-originating materials contained in such intermediate material for the purposes of determining the originating status of the good.
Article 3.6. Accumulation
1. An originating good of a Party which is used in the working or processing in the territory of the other Party as material for finished goods shall be deemed as a material originating in the territory of the latter Party where the working or processing of the finished goods has taken place.
2. Notwithstanding paragraph 1, an originating good from a Party that does not undergo processing beyond insufficient operations listed in Article 3.8 in the other Party shall retain its originating status of the former Party.
3. The Parties may accumulate origin with third countries, including countries with which both Parties have trade agreements, provided that the Joint Committee establishes, through a decision, the necessary conditions for the application of this paragraph.
Article 3.7. Tolerance (De Minimis)
1. Notwithstanding Article 3.4, a good will be considered to have undergone a change in tariff classification if the value of all non-originating materials that are used in the production of the good and that do not undergo the applicable change in tariff classification does not exceed 10% of the Ex-Works value of the good, provided that the good satisfies all other applicable requirements of this Chapter.
2. The value of non-originating materials referred to in paragraph 1 shall be included in the value of the non-originating materials for any applicable qualifying value content requirement.
Article 3.8. Insufficient Working or Processing
1. The following operations shall be considered as insufficient working or processing to confer the status of originating goods, whether or not the requirements of Article 3.4 are satisfied:
(a) slaughter of animals;
(b) operations to ensure the preservation of goods in good condition during transport and storage, such as drying, freezing, ventilation, cooling, removal of damaged parts and like operations;
(c) sifting, simple classifying or sorting, washing, cutting, sharpening, simple grinding;
(d) cleaning, including removal of dust, oxide, oil, paint or other coverings;
(e) simple painting and polishing operations;
(f) testing or calibration;
(g) placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;
(h) simple mixing of goods, whether or not of different kinds;
(i) simple assembly of parts of articles to constitute a complete good or disassembly of goods into parts;
(j) changes of packing, unpacking or repacking operations, and breaking up and assembly of consignments;
(k) affixing or printing marks, labels, logos and other like distinguishing signs on goods or their packaging;
(l) husking, partial or total bleaching, polishing and glazing of cereals and rice;
(m) mere dilution with water or another substance that does not materially alter the characteristics of the goods; and
(n) a combination of two or more operations specified in subparagraphs (a) to (m).
2. For the purposes of paragraph 1 above, the term “simple” will be defined as following:
a) “Simple” generally describes an activity which does not need special skills, machines, apparatus or equipment specially produced or installed for carrying out the activity.
(b) “Simple mixing” generally describes an activity which does not need special skills, machine, apparatus or equipment specially produce or install for carrying out the activity. However, simple mixing does not include chemical reaction. Chemical reaction means a process (including a biochemical process) which results in a molecule with a new structure by breaking intramolecular bonds and by forming new intramolecular bonds, or by altering the spatial arrangement of atoms in a molecule.
Article 3.9. Indirect Materials
In order to determine whether a good is an originating good, no account shall be taken of the origin of the following indirect materials which might be used in its manufacture:
(a) energy and fuel;
(b) plant and equipment;
(c) machines and tools;
(d) other materials or goods used in the production, testing or inspection of a good and do not enter and which are not intended to enter into the final composition of the good.
Article 3.10. Accessories, Spare Parts, Tools
1. Accessories, spare parts, tools, and instructional or other information materials delivered with a good that form part of the goodâs standard accessories, spare parts, tools, and instructional or other information materials shall be regarded as a part of the good, and shall be disregarded in determining whether or not all the non-originating materials used in the production of the originating goods undergo the applicable change in tariff classification provided that:
(a) the accessories, spare parts, tools, and instructional or other information materials are classified with and not invoiced separately from the good; and
(b) the quantities and value of the accessories, spare parts, tools, and instructional or other information materials presented with the good are customary for the good.
2. Notwithstanding paragraph 1, if the goods are subject to QVC requirement, the value of the accessories, spare parts, tools and instructional or other information materials shall be taken into account as originating or non-originating materials, as the case may be, in calculating the qualifying value content of the goods.
Article 3.11. Packaging Materials and Containers for Retail Sale
1. Each Party shall provide that packaging materials and containers in which a good is packaged for retail sale, if classified with the good, according to Rule 5 of the General Rules for the Interpretation of the Harmonized System, shall be disregarded in determining whether all the non-originating materials used in the production of the good undergo the applicable change in tariff classification set out in Article 3.4.1. (a) and 3.4.2.
2. If the good is subject to qualifying| value content (QVC) requirement, the value of such packaging materials and containers shall be taken into account as originating or non- originating materials, as the case may be, in calculating the qualifying value content of the good.
Article 3.12. Packing Materials and Containers for Transportation and Shipment
Each Party shall provide that packing materials and containers for transportation and shipment are disregarded in determining whether a good is originating.
Article 3.13. Fungible Goods and Materials
1. Each Party shall provide that the determination of whether fungible goods or materials are originating shall be made through physical segregation of each good or material, or, in case of any difficulty, through the use of any inventory management method, such as averaging, last-in-first-out (LIFO), or first-in-first out (FIFO), recognised in the generally accepted accounting principles of the Party in which the production is performed or otherwise accepted by the Party in which the production is performed.
2. Each Party shall provide that an inventory management method selected under paragraph 1 of this Article for particular fungible goods or materials shall continue to be used for those fungible goods or materials throughout the fiscal year of the Party that selected the inventory management method.
Article 3.14. Sets of Goods
1. Sets, as defined in General Rule 3 of the HS, shall be regarded as originating when all component goods of the set are originating. However, when a set is composed of originating and non-originating goods, the set as a whole shall be regarded as originating, provided that the value of non-originating goods does not exceed 15% of the Ex- Works value of the set.
2. The provisions in paragraph 1 of this Article shall prevail over the provisions set out in Article 3.4.
Section B. Territorial Requirements
Article 3.15. Principle of Territoriality
1. The conditions for acquiring originating status set out in Article 3.2 must be fulfilled without interruption in the territory of the Party.
2. Where originating goods exported from the territory of a Party to a non-Party, return to the exporting Party, they must be considered as non-originating, unless it can be demonstrated to the satisfaction of the customs authority that:
(a) the returning goods are the same as those exported; and
(b) the returning goods have not undergone any operation beyond that necessary to preserve them in good condition while in that non-Party or while being exported.
3. Notwithstanding paragraphs 1 and 2, the acquisition of originating status set out in Article 3.2 shall not be affected by working or processing done outside a Party on materials exported from a Party and subsequently re-imported there, provided:
(a) the said materials are wholly obtained in any of the Parties or have undergone working or processing beyond the operations referred to in Article 3.8 prior to being exported;
(b) it can be demonstrated to the satisfaction of the customs authority that:
(i) the re-imported goods have been obtained by working or processing the exported materials; and
(ii) the total added value acquired outside a Party by applying the provisions of this Article does not exceed 15% of the Ex-Works value of the end good for which originating status is claimed;
(c) the conditions set out in Article 3.7 shall not apply the said material as referred to in paragraph 3 when determining the origin of the final good; and
(d) information relevant to this Article may be indicated in the Certificate of Origin.
4. For the purposes of applying the provisions of paragraph 3, total added value shall be taken to mean all costs arising outside the Party, including the value of the materials incorporated there.
5. Any working or processing of the kind covered by the provisions of this Article and done outside the Party shall be done under the outward processing arrangements or similar arrangements.
6. Paragraphs 2 to 5 shall be applicable after the Joint Committee has adopted a decision accepting its application.
Article 3.16. Transit and Transshipment
1. Each Party shall provide that an originating good retains its originating status if the good has been transported directly to the importing Party without passing through the territory of a non-Party.
2. Notwithstanding paragraph 1, each Party shall provide that an originating good retains its originating status if transited, transshipped, or is stored in a temporary warehousing through one or more non-Parties, provided that the good:
(a) remained under customs control in the territory of a non-Party; and
(b) have not undergone any operation there other than unloading, reloading, labelling, splitting of shipments or any operation required to keep them in good condition or any other operation that does not transform or change the originating status of the goods.
3. Evidence that the conditions set out in paragraph 2 have been fulfilled shall be supplied to the customs authority of the importing Party through the submission of:
(a) the transport documents, such as the airway bill, the bill of lading or the multimodal transport document, that demonstrate the transport from the country of origin to the importing Party, for those goods with transit or trans- shipment in a non-Party;
(b) the transport documents, such as the airway bill, the bill of lading or the multimodal transport document, that demonstrate the transport from the country of origin to the importing Party and certification issued by the customs authority of the non-Party or any other competent authority designated by the non-Party, for those goods with temporary warehousing in the territory of a non-Party; or
(c) inthe absence of any of the above documents, any other documents requested by the customs authority of the importing Party in accordance with its domestic legislation.
Article 3.17. Free Zones
For greater certainty, goods produced or manufactured in a free zone situated within a Party, shall be considered as originating goods in that Party when exported to the other Party provided that the treatment or processing is in conformity with the provisions of this Chapter and supported by a Proof of Origin.
Article 3.18. Third Party Invoicing
1. The customs authority in the importing Party shall not deny a claim for preferential tariff treatment for the reason that the invoice was not issued by the exporter or producer of a good, provided that the good meets the requirements in this Chapter.
2. The Origin Declaration established in Article 3.22 shall not be provided on an invoice issued by a third Party, instead the Origin Declaration can appear on any other commercial document issued by the approved exporter in the territory of the exporting Party.