The classification of goods in trade between the Parties shall be that set out in each Party's respective tariff nomenclature in conformity with the Harmonised Commodity Description and Coding System ("HS").
Article 63. Fees and other Charges
Fees and other charges referred to in Article 59 shall be limited in amount to the approximate cost of services rendered and shall not represent an indirect protection for domestic products or a taxation of imports or exports for fiscal purposes. They shall be based on specific rates that correspond to the real value of the service rendered.
Section 2. Elimination of Customs Duties
Subsection 2.1. Industrial Products
Article 64. Scope
This sub-section applies to products of HS chapters 25-97 not covered by agricultural and processed agricultural products as defined in Article 70.
Article 65. Customs Duties on Industrial Imports Originating In Chile
Customs duties on imports into the Community of industrial products originating in Chile listed in Annex I (Tariff Elimination Schedule of the Community) under category "Year 0" and "Year 3" shall be eliminated in accordance with the following timetable, so that these customs duties are completely eliminated by the entry into force of the Agreement and on 1 January 2006, respectively :
Percentages of annual tariff reduction
| Category | Entry into force | 1.1.04 | 1.1.05 | 1.1.06 |
| Year 0 | 100% | |||
| Year 3 | 25% | 50% | 75% | 100% |
Article 66. Customs Duties on Industrial Imports Originating In Theacommunity
Customs duties on imports into Chile of products originating in the Community listed in Annex II (Tariff Elimination Schedule of Chile) under category "Year 0", "Year 5" and "Year 7" shall be eliminated in accordance with the following timetable, so that these customs duties are completely eliminated by the entry into force of this Agreement, 1 January 2008 and 1 January 2010, respectively:
Percentages of annual tariff reduction
| Category | Entry into force | 1.1.04 | 1.1.05 | 1.1.06 | 1.1.07 | 1.1.08 | 1.1.09 | 1.1.10 |
| Year 0 | 100% | |||||||
| Year 5 | 16,7% | 33,3% | 50% | 66,7% | 83,3% | 100% | ||
| Year 7 | 12,5% | 25% | 37,5% | 50% | 62,5% | 75% | 87,5% | 100% |
Subsection 2.2. Fish and Fisheries Products
Article 67. Scope
This sub-section applies to fish and fisheries products as covered by HS chapter 3, HS headings 1604 and 1605, HS subheadings 051191 and 230120, and HS subheading ex1902201. (1)
Article 68. Customs Duties on Fish and Fisheries Imports Originating In Chile
1. Customs duties on imports into the Community of fish and fisheries products originating in Chile listed in Annex I under category "Year 0", "Year 4", "Year 7" and "Year 10" shall be eliminated in accordance with the following timetable, so that these customs duties are completely eliminated by the entry into force of this Agreement, 1 January 2007, 1 January 2010 and 1 January 2013, respectively:
Percentages of annual tariff reduction
| Category | Entry into force | 1.1.04 | 1.1.05 | 1.1.06 | 1.1.07 | 1.1.08 | 1.1.09 | 1.1.10 | 1.1.11 | 1.1.12 | 1.1.23 |
| Year 0 | 100% | ||||||||||
| Year 4 | 20% | 40% | 60% | 80% | 100% | ||||||
| Year 7 | 12,5% | 25% | 37,5% | 50% | 62,5% | 75% | 87,5% | 100% | |||
| Year 10 | 9% | 18% | 27% | 36% | 45% | 54% | 63% | 72% | 81% | 90% | 100% |
2. Tariff quotas on imports into the Community of certain fish and fisheries products originating in Chile listed in Annex I under category "TQ" shall be applied as from entry into force of this Agreement, in accordance with the conditions mentioned in that Annex. These quotas shall be managed on a first-come first-served basis.
Article 69. Customs Duties on Fish and Fisheries Imports Originating In the Community
1. Customs duties on imports into Chile of fish and fisheries products originating in the Community listed in Annex II under category "Year 0" shall be eliminated at the entry into force of this Agreement.
2. Tariff quotas on imports into Chile of certain fish and fisheries products originating in the Community listed in Annex II under category "TQ" shall be applied as from entry into force of this Agreement, in accordance with the conditions mentioned in that Annex. These quotas shall be managed on a first-come first-served basis.
Subsection 2.3. Agricultural and Processed Agricultural Products
Article 70. Scope
This sub-section applies to agricultural and processed agricultural products as covered by Annex I of the WTO Agreement on Agriculture.
Article 71. Customs Duties on Agricultural and Processed Agricultural Imports Originating In Chile
1. Customs duties on imports into the Community of agricultural and processed agricultural products originating in Chile listed in Annex I under category "Year 0", "Year 4", "Year 7" and "Year 10" shall be eliminated in accordance with the following timetable, so that these customs duties are completely eliminated by the entry into force of this Agreement, 1 January 2007, 1 January 2010 and 1 January 2013, respectively:
Percentages of annual tariff reduction
| Category | Entry into force | 1.1.04 | 1.1.05 | 1.1.06 | 1.1.07 | 1.1.08 | 1.1.09 | 1.1.10 | 1.1.11 | 1.1.12 | 1.1.13 |
| Year 0 | 100% | ||||||||||
| Year 4 | 20% | 40% | 60% | 80% | 100% | ||||||
| Year 7 | 12,5% | 25% | 37,5% | 50% | 62,5% | 87,5% | 100% | ||||
| Year 10 | 9% | 18% | 27% | 36% | 45% | 54% | 63% | 72% | 81% | 90% | 100% |
2. For the agricultural products originating in Chile covered by chapters 7 and 8 and headings 20.09 and 22.04.30 of the Combined Nomenclature and listed in Annex I under category "EP", for which the Common Customs Tariff provides for the application of ad valorem customs duties and a specific customs duty, the tariff elimination shall only apply to the adAvalorem customs duty.
3. For agricultural and processed agricultural products originating in Chile listed in Annex I under category "SP", for which the Common Customs Tariff provides for the application of adAvalorem customs duties and a specific customs duty, the tariff elimination shall only apply to the adAvalorem customs duty.
4. The Community shall allow imports of processed agricultural products originating in Chile listed in Annex I under category "R" to enter the Community with a customs duty of 50% of the basic customs duty as from the entry into force of this Agreement.
5. Tariff quotas on imports into the Community of certain agricultural and processed agricultural products originating in Chile listed in Annex I under category "TQ" shall be applied as from the entry into force of this Agreement, in accordance with the conditions mentioned in that Annex. These quotas shall be managed on a first-come first-served basis, or, as applicable in the Community, on the basis of a system of import and export licences.
6. Tariff concessions shall not apply to imports into the Community of products originating in Chile listed in Annex I under category "PN" as these products are covered by denominations protected in the Community.
Article 72. Customs Duties on Agricultural and Processed Agricultural Imports Originating In the Community
1. Customs duties on imports into Chile of agricultural and processed agricultural products originating in the Community listed in Annex II under category "Year 0", "Year 5" and "Year 10" shall be eliminated in accordance with the following timetable, so that these customs duties are completely eliminated by the entry into force of this Agreement, 1 January 2008 and 1 January 2013, respectively:
Percentages of annual tariff reduction
| Category | Entry into force | 1.1.04 | 1.1.05 | 1.1.06 | 1.1.07 | 1.1.08 | 1.1.09 | 1.1.10 | 1.1.11 | 1.1.12 | 1.1.13 |
| Year 0 | 100% | ||||||||||
| Year 5 | 16,7% | 33,3% | 50% | 66,6% | 83,3% | 100% | |||||
| Year 10 | 9% | 18% | 27% | 36% | 45% | 54% | 63% | 72% | 81% | 90% | 100% |
2. Tariff quotas on imports into Chile of certain agricultural products originating in the Community listed in Annex II under category "TQ" shall be applied as from the entry into force of this Agreement, in accordance with the conditions mentioned in that Annex. These quotas shall be managed on a first-come first served basis.
Article 73. Emergency Clause for Agricultural and Processed Agricultural Products
1. Notwithstanding Article 92 of this Agreement and Article 5 of the WTO Agreement on Agriculture, if, given the particular sensitivity of the agricultural markets, a product originating in a Party is being imported into the other Party in such increased quantities and under such conditions as to cause or threaten to cause serious injury or disturbance in the markets of like or directly competitive products of the other Party, that Party may take appropriate measures under the conditions and in accordance with the procedures laid down in this Article.
2. If the conditions in paragraph 1 are met, the importing Party may:
(a) suspend the further reduction of any customs duties on the products concerned provided for under this Title; or
(b) increase the customs duty on the product to a level which does not exceed the lesser of:
(i) the most-favoured-nation customs duty; or
(ii) the basic customs duty referred to in Article 60(3).
3. Before applying the measure as defined under paragraph 2, the Party concerned shall refer the matter to the Association Committee for a thorough examination of the situation, with a view to seeking a mutually acceptable solution. If the other Party so requests, the Parties shall hold consultations within the Association Committee. If no solution is found within 30 days of the request for such consultation, safeguard measures may be applied.
4. Where exceptional circumstances require immediate action, the importing Party may take the measures provided for in paragraph 2 on a transitional basis without complying with the requirements of paragraph 3 for a maximum period of 120 days. Such measures shall not exceed what is strictly necessary to limit or redress the injury or disturbance. The importing Party shall inform the other Party inmediately.
5. The measures taken under this Article shall not exceed what is necessary to remedy the difficulties which have arisen. The Party imposing the measure shall preserve the overall level of preferences granted for the agricultural sector. To achieve this objective, the Parties may agree on compensation for the adverse effects of the measure on their trade, including the period during which a transitional measure applied in accordance with paragraph 4 is in place. To this effect, the Parties shall hold consultations to reach a mutually agreed solution. If no agreement is reached within 30 days, the affected exporting Party may, after notification to the Association Council, suspend the application of substantially equivalent concessions under this Title.
6. For the purposes of this Article:
(a) "serious injury" shall be understood to mean a significant overall impairment in the position of the producers as a whole of the like or directly competitive products operating in a Party.
(b) "threat of serious injury" shall be understood to mean serious injury that is clearly inminent based on facts and not merely on allegations, conjecture or remote possibility.
Article 74. Evolution Clause
During the third year after the entry into force of this Agreement the Parties shall assess the situation, taking account of the pattern of trade in agricultural products and processed agricultural products between the Parties, the particular sensitivities of such products and the development of agricultural policy on both sides. The Parties shall examine, in the Association Committee, product by product and on an orderly and appropriate reciprocal basis, the opportunities for granting each other further concessions with a view to improving liberalisation of trade in agricultural and processed agricultural products.
Chapter II. Non Tariff Measures
Section 1. Common Provisions
Article 75. Scope
The provisions of this Chapter shall apply to trade in goods between the Parties.
Article 76. Prohibition of Quantitative Restrictions
All import or export prohibitions or restrictions in trade between the Parties, other than customs duties and taxes, whether made effective through quotas, import or export licenses or other measures, shall be eliminated upon the entry into force of this Agreement. No new such measures shall be introduced.
Article 77. National Treatment on Internal Taxation and Regulation (2)
1. Imported products of the territory of the other Party shall not be subject, either directly or indirectly, to internal taxes or other internal charges of any kind in excess of those applied, directly or indirectly, to like domestic products. Moreover, the Parties shall not otherwise apply internal taxes or other internal charges so as to afford protection to domestic production. (3)
2. Imported products of the territory of the other Party shall be accorded treatment no less favourable than that accorded to like domestic products in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use. The provisions of this paragraph shall not prevent the application of differential internal transportation charges which are based exclusively on the economic operation of the means of transport and not on the nationality of the product.
3. Neither Party shall establish or maintain any internal quantitative regulation relating to the mixture, processing or use of products in specified amounts or proportions which requires, directly or indirectly, that any specified amount or proportion of any product which is the subject of the regulation must be supplied from domestic sources. Moreover, neither Party shall otherwise apply internal quantitative regulations so as to afford protection to domestic production. (4)
4. The provisions of this Article shall not prevent the payment of subsidies exclusively to domestic producers, including payments to domestic producers derived from the proceeds of internal taxes or charges applied consistently with the provisions of this Article and subsidies effected through governmental purchases of domestic products.
5. The provisions of this Article shall not apply to laws, regulations, procedures or practices governing public procurement, which shall be subject exclusively to the provisions of Title IV of this Part of the Agreement.
Section 2. Antidumping and Countervailing Measures
Article 78. Antidumping and Countervailing Measures
If a Party determines that dumping and/or countervailable subsidisation is taking place in its trade with the other Party, it may take appropriate measures in accordance with the WTO Agreement on Implementation of Article VI of the GATT 1994 and the WTO Agreement on Subsidies and Countervailing Measures.
Section 3. Customs and Related Matters
Article 79. Customs and Related Trade Matters
1. In order to ensure compliance with the provisions of this Title as they relate to customs and trade-related matters, and to facilitate trade without prejudice to the need for effective control, the Parties undertake to:
(a) cooperate and exchange information concerning customs legislation and procedures;
(b) apply customs rules and procedures agreed by the Parties at a bilateral or multilateral level;
(c) simplify requirements and formalities in respect of the release and clearance of goods, including, to the extent possible, collaboration on the development of procedures enabling the submission of import or export data to a single agency; and to coordinate between customs and other control agencies so as to enable official controls upon import or export to be carried out, as far as possible, by a single agency;
(d) cooperate on all issues concerning rules of origin and the customs procedures related to them; and
(e) cooperate on all customs valuation matters, in accordance with the Agreement on Implementation of Article VII of the GATT 1994, particularly with the aim of reaching common views regarding the application of valuation criteria, the use of indicative or reference indices, operational aspects and working methods.
2. In order to improve working methods and to ensure transparency and efficiency of customs operations, the Parties shall:
(a) ensure that the highest standards of integrity be maintained, through application of measures reflecting the principles of the relevant international conventions and instruments in this field, as provided for in each Party's legislation;
(b) take further steps wherever possible, towards the reduction, simplification and standardisation of data in the documentation required by customs, including the use of a single customs entry document or data message and a single customs exit document or data message, based on international standards and relying as far as possible on commercially available information;
(c) collaborate wherever possible on legislative and operational initiatives relating to import, export and customs procedures, and, to the extent possible, towards improving the service to the business community;
(d) cooperate where appropriate on technical assistance, including the organisation of seminars and placements;
(e) cooperate on the computerisation of customs procedures and collaborate, where possible, towards the establishment of common standards;
(f) apply the international rules and standards in the field of customs, including wherever possible, the substantive elements of the revised Kyoto Convention on the Simplification and Harmonisation of Customs Procedures;
(g) as far as possible, establish common positions in international organisations in the field of customs such as the WTO, the World Customs Organisation (WCO), the United Nations Organization (UN) and the United Nations Conference on Trade and Development (UNCTAD);
(h) provide effective and prompt procedures enabling the right of appeal, against customs and other agency administrative actions, rulings and decisions affecting import or export of goods, in conformity with Article X of the GATT 1994; and
(i) collaborate wherever possible towards facilitating transhipment operations and transit movements through their respective territories.
3. The Parties agree that their respective trade and customs provisions and procedures shall be based upon:
(a) legislation that avoids unnecessary burdens on economic operators, that will not hinder the fight against fraud and provides further facilitation for operators that meet high levels of compliance;
(b) the protection of legitimate trade through the effective enforcement of legislative requirements;
(c) the application of modern customs techniques, including risk assessment, simplified procedures for entry and release of goods, post release controls, and company audit methods, whilst respecting the confidential nature of commercial data in accordance with the provisions applicable in each Party. Each Party will take the necessary measures to ensure the effectiveness of the risk assessment methods;
(d) procedures that are transparent, efficient and where appropriate simplified, in order to reduce costs and increase predictability for economic operators;
(e) the development of information technology-based systems, for both export and import operations, between economic operators and customs administrations, and between customs and other agencies. Such systems may also provide for the payment of duties, taxes and other fees by electronic transfer;
(f) rules and procedures that provide for advance binding rulings on tariff classification and rules of origin. A ruling may be modified or revoked at any time but only after notification to the affected operator and without retroactive effect unless the ruling has been made on the basis of incorrect or incomplete information being provided;
(g) provisions that in principle facilitate the importation of goods through the use of simplified or pre-arrival customs procedures and processes; and
(h) import provisions that do not include any requirements for pre-shipment inspections as defined by the WTO Agreement on Pre-shipment Inspection;
(i) rules that ensure that any penalties imposed for minor breaches of customs regulations or procedural requirements are proportionate and, in their application, do not give rise to undue delays in customs clearance, in accordance with Article VIII of the GATT 1994.
4. The Parties agree:
(a) on the need for timely consultation with economic operators on substantial matters concerning legislative proposals and general procedures related to customs. To that end, appropriate consultation mechanisms between administrations and the operators shall be established by each Party;
(b) to publish, as far as possible through electronic means, and publicise new legislation and general procedures related to customs, as well as any modifications, no later than the entry into force of such legislation and procedures. They shall also make publicly available general information of interest to economic operators, such as the hours of operation for customs offices, including those at ports and border crossing points, and the points of contact for information enquiries;
(c) to foster cooperation between operators and customs administrations via the use of objective and publicly accessible Memoranda of Understanding, based on those promulgated by the WCO; and
(d) to ensure that their respective customs and related requirements and procedures continue to meet the needs of the trading community and follow best practices.
5. Notwithstanding paragraphs 1 to 4, the administrations of both Parties shall provide mutual administrative assistance in customs matters in accordance with the provisions of the Protocol of 13 June 2001 on Mutual Administrative Assistance in Customs Matters to the Framework Cooperation Agreement.
Article 80. Customs Valuation
The WTO Agreement on Implementation of Article VII of the GATT 1994, without the reserves and options provided for in Article 20 and paragraphs 2, 3 and 4 of Annex III of that Agreement, shall govern customs valuation rules applied to trade between the Parties.
Article 81. Special Committee on Customs Cooperation and Rules of Origin
1. The Parties hereby establish a Special Committee on Customs Cooperation and Rules of Origin, composed of representatives of the Parties. The Committee shall meet on a date and with an agenda agreed in advance by the Parties. The office of chairperson of the Committee shall be held alternately by each of the Parties. The Committee shall report to the Association Committee.
2. The functions of the Committee shall include:
(a) monitoring the implementation and administration of Articles 79 and 80 and of Annex III and any other customs matters related to market access;
(b) providing a forum to consult and discuss on all issues concerning customs, including in particular, rules of origin and related customs procedures, general customs procedures, customs valuation, tariff regimes, customs nomenclature, customs cooperation and mutual administrative assistance in customs matters;
(c) enhancing cooperation on the development, application and enforcement of rules of origin and related customs procedures, general customs procedures and mutual administrative assistance in customs matters;
(d) any other issues agreed by the Parties. 3. In order to fulfil the tasks referred to in this Article, the Parties may agree to hold ad hoc meetings.
Article 82. Enforcement of Preferential Treatment
1. The Parties agree that administrative cooperation is essential for the implementation and control of the preferences granted under this Title and reaffirm their commitment to combat irregularities and fraud related to origin, including customs classification and customs value.
2. In this regard, a Party may temporarily suspend the preferential treatment granted under this Title for a product or products in respect of which that Party determines, in accordance with this Article, that there has been systematic failure to provide administrative cooperation or fraud by the other Party.
3. For the purpose of this Article, systematic failure to provide administrative cooperation shall mean:
(a) the absence of administrative cooperation, such as a failure to provide names and addresses of customs or government authorities responsible for issuing and checking certificates of origin, or specimens of stamps used to authenticate the certificates, or a failure to update that information where appropriate;
(b) a systematic lack or inadequacy of action in verifying the originating status of products and the fulfilment of the other requirements of Annex III and identifying or preventing contravention of the rules of origin;
(c) a systematic refusal or undue delay to carry out subsequent verification of the proof of origin at the request of the other Party, and to communicate its results in time;
(d) the absence or systematic lack of administrative cooperation in verifying conduct where there is a presumption of origin-related fraud. For this purpose, a Party may presume the existence of fraud, inter alia, where imports of a product or products under this Agreement massively exceed the usual levels of production and export capacity of the other Party.
4. The Party which has made a finding of systematic failure to provide administrative cooperation or presumption of fraud shall, before applying the temporary suspension provided under this Article, supply the Association Committee with all relevant information required for a thorough examination of the situation with a view to seeking a solution acceptable to the Parties. At the same time, it shall publish in its Official Journal a notice to the importers indicating the product or products for which a finding of systematic failure to provide administrative cooperation or presumption of fraud has been made. The legal consequences of this publication shall be governed by the domestic law of each Party.
5. Within 10 days after the day of notification of the information referred to in paragraph 4, the Parties shall hold consultations within the Association Committee. If the Parties do not reach an agreement on a solution to avoid application of the temporary suspension of the preferential treatment within 30 days from the initiation of such consultations, the Party concerned may suspend temporarily the preferential treatment of the product or products concerned. The temporary suspension shall not exceed what is necessary to protect the financial interests of the Party concerned.
6. Temporary suspensions under this Article shall be notified immediately after their adoption to the Association Committee. They shall not exceed a period of six months which may be renewed. They shall be subject to periodic consultations within the Association Committee, particularly with a view to their abolition as soon as circumstances permit. Standards, technical regulations and conformity assessment procedures
Article 83. Objective
The objective of this section is to facilitate and increase trade in goods by eliminating and preventing unnecessary barriers to trade while taking into account the legitimate objectives of the Parties and the principle of non-discrimination, within the meaning of the WTO Agreement on Technical Barriers to Trade ( "the TBT Agreement").
Article 84. Scope and Coverage
The provisions of this section apply to trade in goods in the area of standards, technical regulations and conformity assessment procedures, as defined in the TBT Agreement. It does not apply to measures covered by section 5 of this Chapter. Technical specifications prepared by governmental bodies for public procurement purposes are not subject to the provisions of this section but are addressed in Title IV of this Part of the Agreement.
Article 85. Definitions
For the purpose of this section, the definitions of Annex I of the TBT Agreement shall apply. In this respect, the 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, of the WTO Committee on Technical Barriers to Trade, shall also apply.
Article 86. Basic Rights and Obligations
The Parties confirm their rights and obligations under the TBT Agreement and their commitment to its comprehensive implementation. In this respect and in line with the objective of this section, cooperation activities and measures pursued under this section shall be conducted with a view to enhancing and reinforcing the implementation of those rights and obligations.
Article 87. Specific Actions to Be Pursued Under this Agreement
With a view to fulfilling the objective of this section:
1. The Parties shall intensify their bilateral cooperation in the field of standards, technical regulations and conformity assessment with a view to facilitating access to their respective markets, by increasing the mutual knowledge, understanding and compatibility of their respective systems.
2. In their bilateral cooperation the Parties shall aim at identifying which mechanisms or combination of mechanisms are the most appropriate for particular issues or sectors. Such mechanisms include aspects of regulatory co-operation, inter alia convergence and/or equivalence of technical regulations and standards, alignment to international standards, reliance on the supplier's declaration of conformity and use of accreditation to qualify conformity assessment bodies, and mutual recognition agreements.
3. Based on progress made in their bilateral cooperation, the Parties shall agree on what specific arrangements should be concluded with a view to implementing the mechanisms identified.
4. To this end, the Parties shall work towards:
(a) developing common views on good regulatory practices, including, but not limited to:
(i) transparency in the preparation, adoption and application of technical regulations, standards and conformity assessment procedures;
(ii) necessity and proportionality of regulatory measures and related conformity assessment procedures, including the use of suppliers declaration of conformity;
(iii) use of international standards as a basis for technical regulations, except when such international standards would be an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued;