1. Containers and packing materials in which a good is packed for transportation shall be disregarded for purposes of determining whether all non-originating materials used in the production of the good comply with the applicable change in tariff classification set out in the Annex to Article 6-03. Where the good is subject to the regional value content requirement, the value of the shipping packing materials in which a good is packed for transportation shall be considered as originating or non-originating, as the case may be, in calculating the regional value content of the good.
2. When the good is subject to the regional value content requirement, the value of the packing material for shipment shall be the cost of that material as reported in the records of the producer of the good.
Article 6-17. Consultation and Modifications.
1. The Parties create a Working Group on Rules of Origin, composed of representatives of each Party, which shall meet at least twice a year, as well as at the request of any Party.
2. It will be the responsibility of the Working Group:
a) to ensure the effective implementation and administration of this chapter;
b) to reach agreements on the interpretation, application and administration of this chapter; and
c) to attend to any other matter agreed upon by the Parties.
3. The Parties shall consult regularly to ensure that this Chapter is implemented effectively, uniformly and in accordance with the spirit and objectives of this Agreement and shall cooperate in the implementation of this Chapter.
4. Any Party that considers that this chapter requires modification due to changes in the development of the productive processes or other matters, may submit to the Working Group for its consideration a proposal for modification and the reasons and studies that support it. The Working Group shall submit a report to the Commission so that it may make the pertinent recommendations to the Parties.
5. The Parties listed in the annex to this article may consult through the Working Group on Rules of Origin in accordance with the provisions of that annex.
Article 6-18. Regional Content Provisions.
1. The regional content expressed as a percentage will be:
a) for goods classified in chapters 28 to 40 of the Harmonized System:
(i) 40% during the first three years after the entry into force of this Treaty;
(ii) 45% during the fourth and fifth year after the entry into force of this Agreement; and
(iii) 50% as of the first day of the sixth year after the entry into force of this Treaty;
b) for goods classified in chapters 72 to 85 and 90 of the Harmonized System, 50% as of the entry into force of this Agreement;
c) for goods not included in subparagraphs a) and b): (i) 50% during the first five years after the entry into force of this Agreement; and ii) 55% as of the first day of the sixth year after the entry into force of this Treaty.
d) the regional content percentages established in subparagraph c) do not apply to goods for which a different percentage is specified in the annex to Article 6-03, Section B.
Article 6-19. Special Provisions.
1. For the purposes of the preferences set out in the Duty-Free Program for goods that do not have a specific rule of origin in this Agreement, as well as for goods included in a tariff item or tariff heading identified with the code "EXCL" in the Duty-Free Program, Resolution No. 78 of the ALADI Committee of Representatives shall apply. The provisions of Chapter VII shall apply with respect to the goods referred to in this paragraph.
2. The annex to this article applies to the Parties indicated therein.
Article 6-20. Regional Input Integration Committee.
1. The Parties establish the Regional Input Integration Committee (CIRI).
2. Each Party shall designate, for each case that arises, a representative of the public sector and a representative of the private sector to integrate the CIRI, except in the case of goods classified in chapters 50 to 63, in which the CIRI will be integrated only by representatives of Colombia and Mexico, until the rules of origin are agreed between Mexico and Venezuela for the goods classified in those chapters.
3. The CIRI shall operate for a period of 10 years from the entry into force of this Agreement. However, if during the last three years waivers have been granted under the terms of paragraph 2 of Article 6-23, the term shall be extended for such period and for such goods as the Parties may agree.
Article 6-21. Functions of CIRI.
1. CIRI shall evaluate the actual and proven inability in the territory of the Parties of a producer of goods to make available on normal commercial terms, in terms of timeliness, volume, quality and prices, for equivalent transactions, the materials referred to in paragraph 3 used by the producer in the production of a good.
2. For purposes of paragraph 1, producer means a producer of goods for export to the territory of another Party under preferential tariff treatment.
3. The materials used in the production of a good referred to in paragraph 1 are only those specified in the annex to this article.
Article 6-22. Procedure.
1. For the purposes of Article 6-21, the CIRI shall conduct an investigation procedure that may be initiated at the request of a Party or at the request of the Commission. This procedure shall commence within five days of receipt of the request and the documentation supporting it.
2. Inthe course of this procedure, CIRI will evaluate the evidence submitted to it.
Article 6-23. Opinion to the Commission.
1. CIRI shall issue an opinion to the Commission within forty days from the date of initiation of the investigation procedure. 2. CIRI will rule:
a) on the producer's inability to dispose of materials under the terms indicated in paragraph 1 of article 6-21; and
b) when the inability referred to in subparagraph (a) is established, on the amounts and terms of the waiver required in the use of the materials referred to in paragraph 3 of Article 6-21, in order for a good to qualify for preferential tariff treatment.
3. CIRI shall send its opinion to the Commission within five days of its issuance.
Article 6.24. Resolution of the Commission.
1. If CIRI issues an opinion under the terms of Article 6-23, the Commission shall issue a resolution within ten days of receiving the opinion, in accordance with the provisions of paragraph 3 of Article 6-23, unless it agrees to a different term.
2. When the incapacity referred to in paragraph 1 of Article 6-21 is established, the resolution of the Commission shall establish a waiver, in the amounts and terms agreed upon by CIRI in its opinion, for the use of the materials referred to in paragraph 3 of Article 6-21, with such modifications as it deems appropriate.
3. If the Commission has not taken a decision within the time limit referred to in paragraph 1, the opinion of CIRI shall be deemed to be ratified.
4. The resolution referred to in paragraph 2 shall be valid for a maximum of one year from the date of its issuance. The Commission may extend, at the request of the Party concerned, within six months prior to its expiration and after review by the CIRI, its resolution for an equal term if the causes that gave rise to it persist.
5. Any Party may request, at any time during its term, the review of the Commission's resolution.
Article 6-25. Referral to the Commission.
1. If the CIRI does not issue the opinion referred to in Article 6-23 within the time limits mentioned therein, because there is insufficient information or consensus on the case in question, the consultations referred to in Article 19-05 shall be deemed concluded and shall be referred to the Commission within five days following the expiration of that time limit.
2. The Commission shall issue a resolution in terms of paragraph 2 of article 6-23 within 10 days. If the Commission does not issue a resolution, the provisions of articles 19-07 to 19-17 shall apply subject to the provisions of paragraphs 3 to 7.
3. The term for the installation and issuance of the final resolution of the arbitration tribunal referred to in Article 19-07 shall be fifty days.
4. For the purposes of paragraph 2, it shall be understood that the mission of the arbitral tribunal shall be to render a decision in terms of article 6-23, paragraph 2 (a) and (b).
5. The final decision of the arbitral tribunal shall be binding on the Parties and, if it decides on the waiver referred to in Article 6-23(2)(b), shall be valid for a maximum of one year. The Commission may extend, at the request of the Party concerned within six months prior to its expiration and after review by CIRI, the decision of the arbitral tribunal for an equal term, if the causes that gave rise to it persist.
6. The complaining Party may invoke the provisions of Article 19-17, paragraphs 1 to 3, if the arbitral tribunal rules in its favor and the Party complained against fails to comply with the final decision within the period of time fixed by the arbitral tribunal.
7. The Party complained against may avail itself of the provisions of paragraphs 4 and 5 of article 19-17.
Article 6-26. Operating Regulations.
1. Not later than January 1, 1995, the Parties shall agree on rules of operation for CIRI. 2. The regulations shall include the rules of operation of the CIRI and the conditions regarding delivery times, quantity, quality and prices of the materials referred to in paragraph 3 of article 6-21.
Chapter VII. Customs Procedures
Article 7-01. Definitions
1. The definitions in Chapter VI are incorporated into this chapter.
2. For the purposes of this chapter, the following definitions shall apply:
competent authority: the authority which, under the domestic law of each Party, is responsible for the administration of its customs, tax or trade laws and regulations.
identical goods: goods that are alike in all respects, including their physical characteristics, quality and commercial prestige. Minor differences in appearance do not prevent them from being considered identical;
preferential tariff treatment: the application of the import tax to an originating good in accordance with the Annex to Article 3-04.
Article 7-02. Declaration and Certification of Origin.
1. The certificate of origin established in Annex 1 to this Article shall serve to certify that a good exported from the territory of one Party to the territory of another Party qualifies as originating. This certificate may be modified by agreement of the Parties.
2. Each Party shall provide that for the export to another Party of a good in respect of which the importer is entitled to claim preferential tariff treatment, the exporter shall complete and sign a certificate of origin in respect of that good. The exporter's certificate of origin shall require validation by the competent authority of the exporting Party.
3. In the event that the exporter is not the producer of the good, he shall complete and sign the certificate of origin on the basis of a declaration of origin in accordance with Annex 2 to this Article covering the good being exported, completed and signed by the producer of the good and provided voluntarily to the exporter. The declaration of origin completed and signed by the producer shall not be validated under the terms of paragraph 2.
4. The authority of the exporting Party:
a) maintain the administrative mechanisms for the validation of the certificate of origin completed and signed by the exporter;
b) provide, at the request of the importing Party, information concerning the origin of the goods imported under preferential tariff treatment; and
c) communicate to the other Parties the list of the officials authorized to validate the certificates of origin with their corresponding seals, signatures and facsimile. Modifications to this list shall become effective thirty days after receipt of the respective communication.
5. Each Party shall provide that the certificate of origin completed and signed by the exporter and validated by the competent authority of the exporting Party may cover a single importation of one or more goods and shall be valid for one year from the date of signature.
Article 7-03. Obligations with Respect to Imports.
1. Each Party shall require the importer requesting preferential tariff treatment for a good of another Party to:
a) declare in writing, on the import document based on a valid certificate of origin, that the good qualifies as originating;
b) has the certificate of origin in his possession at the time of making such declaration; and
c) present or surrender the certificate of origin when requested by the competent authority.
2. Each Party shall require the importer to present or submit a corrected declaration and pay the corresponding import duties, when the importer has reason to believe that the certificate of origin on which his import declaration is based contains incorrect information. If the importer presents the aforementioned declaration spontaneously, in accordance with the domestic legislation of each Party, he shall not be penalized.
3. Each Party shall provide that where the importer fails to comply with any of the requirements set out in paragraph 1, preferential tariff treatment shall be denied to the good imported from another Party for which the preference was claimed.
4. The request referred to in paragraph 1, subparagraph c) shall not prevent the clearance or release of the good under preferential tariff treatment requested in the import declaration.
Article 7-04. Obligations with Respect to Exports.
1. Each Party shall provide that an exporter or producer of that Party who has completed and signed a certificate or declaration of origin shall provide a copy of the validated certificate or declaration of origin to the competent authority upon request.
2. An exporter or producer who has completed and signed a certificate or declaration of origin and has reason to believe that such certificate or declaration contains incorrect information shall promptly communicate, in writing, any changes which may affect the accuracy or validity of the certificate or declaration to all persons to whom it has been furnished and, in accordance with the legislation of the Party concerned, to the competent authority of the exporting Party. In such a case, he may not be penalized for having submitted an incorrect certificate or declaration.
3. Each Party shall provide that a false certificate or declaration of origin made by an exporter or producer shall have the same administrative consequences as would apply to false declarations or statements made in its territory by an importer in contravention of its customs laws and regulations, with such modifications as the circumstances may require.
Article 7-05. Exceptions.
The certificate of origin shall not be required in the case of the importation of a good for which the Party into whose territory it is imported has waived the requirement of presentation of a certificate of origin.
Article 7-06. Accounting Records.
1. Each Party shall provide that an exporter or a producer who completes and signs a certificate or declaration of origin shall keep for a minimum of five years from the date of signature of the certificate or declaration, all records and documents relating to the origin of the good, including those relating to:
a) the acquisition, costs, value and payment of the good that is exported from its territory;
b) the acquisition, costs, value and payment of all materials used in the production of the good being exported from its territory; and
c) the production of the good in the form in which it is exported from its territory.
2. Each Party shall provide that the exporter or producer shall provide to the competent authority of the importing Party the records and documents referred to in paragraph 1. Where the records and documents are not in the possession of the exporter or producer, the exporter or producer may request the producer or supplier of the materials to provide the records and documents through him to the verifying competent authority.
3. Each Party shall provide that an importer claiming preferential tariff treatment for a good imported from another Party shall retain for at least five years from the date of importation, the certificate of origin and all documentation relating to the importation required by the importing Party.
Article 7-07. Procedures to Verify Origin.
1. Before carrying out a verification in accordance with the provisions of this Article, the competent authority of the importing Party may request information regarding the origin of the exported goods from the competent authority of the exporting Party.
2. To determine whether a good imported from another Party qualifies as originating, each Party may, through the competent authority, verify the origin of the good by:
a) written questionnaires addressed to exporters or producers in the territory of the other Party; or
b) verification visits to an exporter or a 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 7-06, and inspecting the facilities used in the production of the good and, where appropriate, those used in the production of the material.
The provisions of this paragraph shall be without prejudice to the powers of inspection or 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 thirty days. During that period the exporter or producer may request in writing to the importing Party conducting the verification, an extension which shall not exceed thirty days. This request shall not result in the denial of preferential tariff treatment.
4. Inthe event that the exporter or producer fails to return the duly completed questionnaire within the appropriate time limit, the importing Party may deny preferential tariff treatment under paragraph 11.
5. The importing Party that carries out a verification by questionnaire shall have 45 days after receiving the response to the questionnaire to send the notification referred to in paragraph 6, if it deems it appropriate.
6. Before carrying out a verification visit pursuant to paragraph 2(b), the importing Party shall be obliged, through its competent authority, to give at least 30 days' written notice of 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 the latter Party in the territory of the importing Party. The competent authority of the importing Party shall obtain the written consent of the exporter or producer to be visited.
7. The communication referred to in paragraph 6 shall contain:
a) identification of the competent authority making the written communication; b) the name of the exporter or producer you intend to visit; 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 subject to verification referred to in the certificate or certificates of origin;
e) the names and positions of the officials who will carry out the verification visit; and f) the legal basis for the verification visit.
8. Any change in the number, name or position of the officials referred to in paragraph 7(e) shall be communicated in writing to the exporter or producer and to the authority of the exporting Party prior to the verification visit. Any modification of the information referred to in paragraph 7 (a), (b), (c), (d) and (f) shall be notified in accordance with paragraph 6.
9. If within thirty days of receipt of the communication regarding the proposed verification visit pursuant to paragraph 6, 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 visit.
10. Each Party shall allow the exporter or producer whose good is the subject of a verification visit to designate two witnesses to be present during the visit, provided that the witnesses intervene only in that capacity. Failure to designate witnesses by the exporter or producer shall not result in postponement of the visit.
11. The Party that has carried out a verification shall provide the exporter or the producer whose good or goods have been subject to the verification with a document containing the decision determining whether or not the good or goods qualify as originating, including the legal and factual basis for the determination.
12. Where a Party's verification indicates that the exporter or producer has more than once falsely or unfoundedly certified or declared that a good qualifies as originating, the Party may suspend preferential tariff treatment for identical goods exported or produced by that person until that person proves compliance with the provisions of Chapter VI.
13. Each Party shall provide that a decision that a good imported into its territory does not qualify as originating according to the tariff classification or value applied by the Party to one or more materials used in the production of the good, and that differs from the tariff classification or value applied to the materials by the exporting Party, shall not take effect until it is communicated in writing both to the importer of the good and to the exporter or producer who has completed and signed the certificate or declaration of origin covering the good.
14. The Party shall not apply the ruling made under paragraph 13 to an importation made before the date on which the ruling takes effect when the competent authority of the exporting Party has issued a ruling or advance ruling on the tariff classification or value of the materials, as to which there can be certainty under the customs laws and regulations of that exporting Party.
15. Where a Party denies preferential tariff treatment to a good pursuant to a ruling made under paragraph 13, 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 competent authority of the exporting Party.
16. Each Party shall maintain the confidentiality of the information gathered in the process of verification of origin in accordance with the provisions of the domestic legislation of the Parties involved.
Article 7-08. Review and Challenge.
1. Each Party shall grant to exporters and producers of another Party the same rights of review and challenge of origin determination decisions and advance rulings provided to importers in its territory to whom:
a) completes and signs a certificate or declaration of origin covering a good that has been the subject of a decision of determination of origin in accordance with paragraph 11 of Article 7-07; or
b) has received an advance criterion in accordance with article 7-10.
2. Each Party shall, in accordance with paragraph 1, provide access to at least one level of administrative review independent of the official or agency responsible for the decision subject to review, and access to one level of judicial review of the initial decision or decision made at the ultimate level of administrative review. Administrative or judicial review shall be in accordance with the domestic law of each Party.
Article 7-09. Sanctions.
Each Party shall establish or maintain criminal, civil or administrative penalties for violations of its laws and regulations relating to the provisions of this Chapter.
Article 7-10. Anticipated Criteria.
1. Each Party shall provide that, through its competent authority, advance written criteria shall be issued promptly prior to the importation of a good from another Party into its territory. The advance ruling shall be issued at the request of the importer in its territory or the exporter or producer in the territory of the other Party, based on the facts and circumstances presented by them as to whether the goods qualify as originating in accordance with the rules of origin of Chapter VI.
a) whether the non-originating materials used in the production of a good comply with the applicable change in tariff classification set out in the Annex to Article 6-03 of Chapter VI as a result of production taking place in the territory of one or more Parties;
b) whether the good complies with the regional value content requirement set forth in the Annex to Article 6-03 of Chapter VI;
c) whether the method of calculating the value of a good or of the materials used in the production of a good, to be applied by the exporter or producer in the territory of another Party, in accordance with the principles of the Customs Valuation Code and for the purpose of determining whether the good meets the regional value content requirement under the Annex to Article 6-03 of Chapter VI; or
d) such other matters as the Parties may agree.
2. Each Party shall adopt or maintain, after publication, procedures for the issuance of advance criteria that include:
a) a detailed description of the information reasonably required to process a request;
b) the power of its competent authority to request additional information from the applicant at any time during the process of evaluating the application;
c) the obligation to issue the advance ruling within 120 days from the time the authority has obtained all the necessary information from the requesting party; and
d) the obligation to fully explain the reasons for the anticipated criterion when it is unfavorable to the applicant.
3. Each Party shall apply the advance criteria to imports from the date of issuance of the criterion, or ata later date specified therein, unless the advance criterion is modified or revoked in accordance with paragraph 6.
4. Each Party shall accord the same treatment, interpretation and application of the provisions of Chapter VI, concerning the determination of origin, to anyone requesting an advance ruling, where the facts and circumstances are identical in all material respects.
5. The advance ruling may be modified or revoked by the issuing Party in the following cases:
a) when it contains or has been based on any error:
i) in fact;
ii) in the tariff classification of a good or materials;
iii) whether the good meets the regional value content requirement;
b) when the anticipated criterion is not in conformity with an interpretation agreed between the Parties with respect to the rules of origin of this Agreement;
c) to comply with a court decision; and d) when the circumstances or facts on which the anticipated criterion is based change.
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. The modification or revocation of an advance ruling may not be applied to imports of a good made before those dates, unless the person to whom the ruling was issued has not acted in accordance with the terms and conditions of the ruling originally issued.
7. Notwithstanding paragraph 7, the Party issuing the advance ruling shall postpone the effective date of the modification or revocation for a period not exceeding ninety days, where the person to whom the advance ruling was issued has relied on that ruling in good faith and to its detriment.
8. Each Party shall provide that, when examining the regional value content of a good for which an advance ruling has been issued, the competent authority shall assess whether:
a) the exporter or producer complies with the terms and conditions of the advance criterion;
b) the exporter's or producer's operations are consistent with the circumstances and the essential facts on which such judgment is based; and
c) the supporting data and calculations used in the application of the method to calculate the value are correct in all material respects.
9. Each Party shall provide that where the competent authority determines that any of the requirements set forth in paragraph 9 have not been met, it may modify or revoke the advance ruling, as the circumstances warrant.
10. Each Party shall provide that, where the competent authority decides that the advance ruling was based on incorrect information, the person to whom it was 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.