11. Each Party may apply such measures as the circumstances warrant where the competent authority has issued an advance ruling to a person who has falsely represented or omitted material facts or circumstances on which the advance ruling is based, or has failed to act in accordance with the terms and conditions of the advance ruling.
12. The validity of an advance ruling shall be subject to the continuing obligation of the person to whom it was issued to inform the competent authority of any substantial change in the facts or circumstances on which the authority relied to issue that ruling.
Article 7-11. Customs Procedures Working Group.
1. The Parties create a Customs Procedures Working Group composed of representatives of each Party to meet at least twice a year, or at the request of either Party.
2. It will be the responsibility of the Working Group:
a) seek to reach agreements on:
i) the interpretation, application and administration of this chapter;
ii) tariff classification and valuation matters related to origin determinations;
iii) the procedures for the application, approval, modification, revocation and application of the anticipated criteria;
iv) amendments to the certificate or declaration of origin; and
v) any other matter submitted to it by a Party.
b) to examine proposals for administrative or operational changes in customs matters that may affect the flow of trade between the Parties.
Chapter VIII. Safeguards
Article 8-01. Definitions.
For the purposes of this chapter, the following definitions shall apply:
similar good: that which, although it does not coincide in all its characteristics with the good to which it is compared, has some identical characteristics, mainly as regards its nature, use, function and quality.
serious injury: a general and significant impairment of a domestic production.
Global measures: emergency measures on the importation of goods under Article XIX of GATT.
domestic production: producer or producers of identical, similar or directly competitive goods operating within the territory of one of the Parties and representing a substantial proportion of the total domestic production of such goods. From the fourth year after the entry into force of this Agreement, that substantial proportion shall be at least 40%.
Article 8-02. Safeguard Regime.
The Parties may apply to imports of goods made in accordance with this Agreement a safeguard regime whose application shall be based on clear, strict and time-bound criteria. The safeguard regime provides for measures of a bilateral or global nature.
Section A. Bilateral Measures.
Article 8-03. Conditions of Application.
If as a result of the application of the Duty Drawback Program the importation of one or more goods originating in any of the Parties is made in such quantities and under such conditions that, by themselves, they are the substantial cause of serious injury or threat of serious injury to the domestic production of identical, similar or directly competitive goods, the importing Party may adopt bilateral safeguard measures, which shall be applied in accordance with the following rules:
a) where strictly necessary to counteract serious injury or threat thereof caused by imports originating in the other Party, a Party may adopt safeguard measures within a period of fifteen years from the date of entry into force of this Agreement;
b) the measures shall be exclusively of a tariff nature. The tariff to be determined shall in no case exceed the tariff in force against third countries for that good at the time the safeguard is adopted;
c) the measures may be applied for a period of up to one year and may be extended once, for an equal and consecutive period, as long as the conditions that motivated them persist;
d) upon termination of the measure, the tariff rate or tariff rate shall be the one that corresponds to the good subject to the measure according to the Duty-Free Program.
Article 8-04. Compensation for Bilateral Measures.
1. When the cause of the application of the bilateral safeguard measure is threat of serious injury or when the Party intends to extend the measure, it shall grant the exporting Party mutually agreed compensation, which shall consist of temporary additional tariff concessions, the effects of which on the trade of the exporting Party are equivalent to the impact of the safeguard measure.
2. The Parties shall agree on the terms of the compensation referred to in paragraph 1 at the stage of prior consultations established in Article 8-14.
3. If the Parties fail to reach agreement on compensation, the Party proposing to adopt the measure shall have the authority to do so and the exporting Party may adopt tariff measures that have trade effects equivalent to those of the measure adopted.
Section B. Overall Measures
Article 8-05. Rights Under GATT.
The Parties confirm their rights and obligations under Article XIX of the GATT with respect to any emergency measures taken by a Party in the implementation of this Agreement.
Article 8-06. Criteria for the Adoption of a Measure.
1. When a Party decides to adopt a global safeguard measure, it may only apply it to the other Party when imports of a good from the latter, considered individually, represent a substantial part of total imports and contribute in a significant manner to the serious injury or threat of serious injury to the domestic production of the importing Party.
2. For the purposes of paragraph 1, the following criteria shall be taken into account:
a) imports from the other Party shall not normally be considered substantial if the other Party is not one of the five principal suppliers of the good subject to the proceeding, based on its participation in such imports during the immediately preceding three years;
b) imports from the other Party shall not normally be considered to contribute importantly to serious injury or threat of serious injury if their rate of growth during the period in which the injurious increase in imports is substantially less than the rate of growth of total imports of the good into the Party proposing to take the measure from all sources during the same period.
Article 8-07. Compensation for Global Measures.
The Party adopting a global safeguard measure shall grant the exporting Party compensation in accordance with the provisions of the GATT.
Section C. Procedure
Article 8-08. Adoption Procedure.
The Party that intends to adopt a bilateral or global safeguard measure pursuant to this Chapter shall comply with the procedure provided for in this Section.
Article 8-09. Investigation.
1. In order to determine whether a safeguard measure should be applied, the competent authority of the importing Party shall conduct an investigation, which may be ex officio or at the request of a party.
2. The purpose of the investigation referred to in the paragraph shall be:
a) assess the volume and conditions under which imports of the good in question are made;
b) prove the existence of serious injury or threat of serious injury to domestic production;
c) to prove the existence of a direct causal link between the increase in imports of the good and the serious injury or threat of serious injury to the domestic production.
Article 8-10. Determination of Damage.
For purposes of establishing the existence of serious injury or threat of serious injury, the competent authorities shall evaluate factors of an objective and quantifiable nature having a bearing on the affected domestic production, in particular the rate and amount of the increase in imports of the good in question, in absolute and relative terms; the share of the domestic market absorbed by the increase in imports; changes in the level of sales; domestic prices; production; productivity; utilization of installed capacity; profits; losses and employment.
Article 8-11. Effect of other Factors.
If factors other than increased imports from the other Party are injuring or threatening to injure domestic production at the same time, the injury caused by these factors cannot be attributed to the imports in question.
Article 8-12. Publication and Communication.
The resolution ordering the initiation of a safeguard investigation shall be published in the respective official publication of the importing Party and shall be communicated to the interested parties within ten working days following such publication.
Article 8-13. Content of the Communication.
The competent authority shall make the communication referred to in article 8-12, which shall contain sufficient background information to support and motivate the initiation of the investigation, including:
a) the names and available addresses of the domestic producers of identical or similar goods or direct competitors representative of the domestic production; their share in the domestic production of such goods and the reasons why they are considered representative of that sector;
b) aclear and complete description of the goods subject to the investigation, the tariff items under which they are classified and the tariff treatment in force, as well as the identification of identical, similar or directly competitive goods;
c) import data for the three years prior to the initiation of the investigation;
d) data on the total domestic production of the identical, similar or directly competitive goods for the three years prior to the initiation of the proceeding;
e) data demonstrating that there is prima facie evidence of serious injury or threat thereof to the domestic production in question caused by the imports, and a summary of the basis for the allegation that increased imports of such goods, relative or absolute to domestic production, are the cause thereof; and
f) where appropriate, the criteria and objective information demonstrating that the conditions for the application of a comprehensive safeguard measure to the other Party set out in this Chapter are met.
Article 8-14. Prior Consultations.
1. If, as aresult of the safeguard investigation, the competent authority determines, on the basis of objective evidence, that the conditions provided for in this Chapter are met, the Party that decides to initiate a procedure that could result in the adoption of a safeguard measure shall so inform the other Party, requesting consultations as provided for in this Chapter.
2. A third Party that expresses a substantial interest in the application of a bilateral safeguard measure because its trade may be affected by the application of the measure may participate in the consultations referred to in paragraph 1.
3. The importing Party shall provide adequate opportunity for prior consultations. The period of prior consultations shall begin on the day following receipt by the exporting Party of the communication containing the request for such consultations. The communication shall contain the data demonstrating the serious injury or threat of serious injury caused by the imports subject to investigation, and relevant information on the safeguard measures intended to be taken and their duration.
4. The prior consultation period shall be forty-five days, unless the Parties agree otherwise.
5. Safeguard measures may only be adopted once the prior consultation period has concluded.
Article 8-15. Confidential Information.
1. The consultation procedure shall not oblige the Parties to disclose information that has been provided on a confidential basis, the disclosure of which could infringe their laws regulating the matter or harm commercial interests.
2. Notwithstanding the foregoing, the importing Party intending to apply the measure shall provide a non- confidential summary of the information of a confidential nature.
Article 8-16. Remarks by the Exporting Party.
During the consultation period, the exporting Party shall make such comments as it deems appropriate, in particular on the appropriateness of invoking the safeguard and the proposed measures.
Article 8-17. Extension.
If the importing Party determines that the reasons that gave rise to the application of the safeguard measure still exist, it shall inform the exporting Party of its intention to extend it, at least sixty days prior to the expiration of the validity of such measures. The extension procedure shall be carried out in accordance with the provisions established in this Chapter for the adoption of safeguard measures.
Chapter IX. Unfair International Trade Practices
Article 9-01. Definitions.
For the purposes of this chapter, the following definitions shall apply: countervailing duty: antidumping duties and countervailing duties or countervailing duties, as the case may be.
interested party: the producers, importers and exporters of the good subject to investigation, as well as foreign legal entities or legal persons having a direct interest in the investigation in question.
final determination: the resolution of the authority that decides whether or not to impose definitive countervailing duties.
initial resolution: the resolution of the competent authority formally declaring the initiation of the investigation.
preliminary determination: the determination of the competent authority that decides whether or not to impose a provisional countervailing duty.
Article 9-02. Export Subsidies.
From the entry into force of this Agreement, the Parties shall not grant subsidies to exports of industrial goods destined for the markets of the Parties. Subsidies on exports of agricultural goods shall be governed in accordance with the provisions of Chapter V, Section A.
Article 9-03. Compensatory Fees.
The importing Party, in accordance with its legislation and in conformity with the provisions of this Agreement, the GATT, the Agreement on Implementation of Article VI of the GATT (Antidumping Code), the Agreement on the Interpretation and Application of Articles VI, XVI and XXIII of the GATT (Subsidies and Countervailing Duties Code), may establish and apply countervailing duties in the event of situations in which, through an objective examination based on positive evidence:
a) the existence of imports is determined:
i) under conditions of dumping; or
ii) of goods that have received export subsidies, including subsidies other than those granted to exports, that adversely affect the conditions of normal competition; and
b) the existence of injury or threat of injury to the domestic production of identical or similar goods in the importing Party or the significant delay in the commencement of such production, as a result of such imports of identical or similar goods from another Party, is proven.
Article 9-04. Minimum Margins.
1. The Party shall terminate the investigations referred to in Article 9-03 when the margin of dumping is less than 2% of the normal value of the investigated good or when the amount of the subsidy is less than 1% ad valorem.
2. Likewise, the investigations referred to in Article 9-03 shall be terminated when the volume of dumped or subsidized imports represents less than 1% of the domestic market of the like good in the importing Party, except in the case in which the volume of imports from the exporting Party is lower, individually considered, but cumulated with dumped or subsidized imports from other countries, represents more than 2.5% of that market.
Article 9-05. Communications and Deadlines.
1. Each Party shall communicate the resolutions on the matter directly to its importers and to the exporters of the other Party of which it is aware and, where appropriate, to the government of the exporting Party, to the responsible national body referred to in Chapter XX, and to the diplomatic mission of the exporting Party accredited in the Party conducting the investigation. Likewise, actions shall be taken to identify and locate the interested parties in the proceeding in order to guarantee the exercise of the right of defense.
2. The communication of the initial determination shall be made within eight working days of its publication in the official publication of the importing Party.
3. The communication of the initial resolution shall contain, at least, the following information:
a) the time limits and place for the presentation of pleadings, evidence and other documents; and
b) the name, address and telephone number of the office where information can be obtained, consultations can be made and the case file can be inspected.
4. Acopy of the respective publication in the official organ of diffusion of the importing Party, as well as a copy of the public version of the complaint and its annexes, shall be sent to the exporters with the communication.
5. The Party shall grant the interested parties of which it has knowledge a period of no less than thirty working days to respond, counted from the publication of the initial resolution in the respective official organ of diffusion, in order for them to appear to state what is in their best interest, and shall grant the interested parties an equal period for the same purposes counted from the publication of the preliminary resolution in that organ.
Article 9-06. Contents of the Resolutions.
The initial, preliminary and final determination shall contain at least the following:
a) the name of the applicant;
b) the indication of the imported good subject to the procedure and its tariff classification;
c) the elements and evidence used to determine the existence of the unfair practice, the damage or threat of damage, and its causal relationship;
d) the legal and factual considerations that led the authority to initiate an investigation or to impose an antidumping duty; and
e) the legal arguments, data, facts or circumstances that support and motivate the resolution in question.
Article 9-07. Rights and Obligations of the Interested Parties.
For the purposes of the rights and obligations established in this Chapter, each Party shall ensure that the interested parties in the administrative investigation have the same rights and obligations. The rights and obligations of the interested parties shall be respected and observed, both in the course of the proceeding and in the administrative and contentious instances that are filed against the final determinations.
Article 9-08. Clarifications.
Once a provisional or definitive countervailing duty has been imposed, the interested parties may request the authority that issued the act to resolve whether a certain good is subject to the measure imposed, or to clarify any aspect of the corresponding resolution.
Article 9-09. Conciliation Hearings.
During the course of the investigation, any interested party may request the competent authority to hold conciliatory hearings with a view to reaching a satisfactory solution.
Article 9-10. Revision.
Definitive countervailing duties may be reviewed by the competent authority in the event of changed circumstances in the market of the importing Party and the export market.
Article 9-11. Validity of Countervailing Duties.
A definitive antidumping duty will be automatically eliminated when after five years from the date of its entry into force, none of the interested parties has requested its review, nor has the competent authority initiated such review ex Officio.
Article 9-12. Access to the File.
Interested parties shall have access to the administrative file of the proceeding in question, except for confidential information contained therein.
Article 9-13. Dispatch of Copies.
Interested parties in the investigation may send to the other interested parties copies of each of the reports, documents and evidence submitted to the investigating authority in the course of the investigation.
Article 9-14. Information Meetings.
1. The competent authority of the importing Party, at the request of the interested parties, shall hold information meetings to provide relevant information on the content of the provisional and final determinations.
2. With respect to a preliminary determination, the request referred to in paragraph 1 may be submitted at any time during the investigation. In the case of a final resolution, such request shall be submitted within five working days following the publication of the resolution in the respective official organ of dissemination. In both cases the competent authority shall conduct the meeting within fifteen working days from the filing of the request.
3. In the information meetings referred to in paragraphs 1 and 2, the interested parties shall have the right to review the reports or technical reports, the methodology, the spreadsheets and, in general, any element on which the corresponding resolution has been based, except for confidential information.
Article 9-15. Other Rights of Interested Parties.
1. The competent authorities shall hold, at the request of a party, conciliatory meetings in which the interested parties may appear and listen to their counterparts regarding the information or evidence that the investigating authority deems appropriate.
2. Interested parties shall be given the opportunity to present their allegations after the evidence period. The pleadings shall consist of the presentation in writing of conclusions regarding the information and arguments rendered during the course of the investigation.
Article 9-16. Publication.
Each Party shall publish the following resolutions in its respective official organ of diffusion:
a) the initial, preliminary and final determination;
b) that which declares the administrative investigation concluded:
i) because of commitments with the exporting Party or with the exporters, as the case may be;
ii) because of commitments arising from conciliation hearings; or
iii) for any other cause.
c) those rejecting the complaints; and
d) those by which the withdrawals of the complainants are accepted.
Article 9-17. Access to other Files.
The competent authority of each Party shall allow interested parties, in the course of an investigation, access to public information contained in the administrative records of any other investigation, after sixty working days from the final resolution of the investigation.
Article 9-18. Reimbursement or Reimbursement.
If a final determination determines a lower countervailing duty than that provisionally determined, the competent authority of the importing Party shall refund the amounts paid in excess.
Article 9-19. Time Limits for Provisional Measures.
No Party shall impose a provisional countervailing duty until sixty working days after the date of publication of the initial determination in its respective official publication.
Article 9-20. Reforms to National Legislation.
1. When a Party decides to amend, add or repeal its legal provisions on unfair international trade practices, it shall notify the other Parties immediately after their publication in its respective official organ of diffusion.
2. Amendments, additions or abrogations shall be compatible with the international regulations mentioned in article 9-03.