Section B. INDUSTRIAL GOODS
Article 2. ELIMINATION OF CUSTOMS DUTIES
1. The provisions of this Article shall apply to products originating in Israel and Colombia listed in Chapters 25-97 of the Harmonized System (HS), except those products whose subheadings are specified in Article 2.15.
2. Except as otherwise provided in this Agreement, each Party shall gradually eliminate its customs duties on goods originating in the other Party in accordance with the schedules included in Annex 2-A .
3. Unless otherwise provided in Annex 2-A (Section 1-A and 1-B), each Party shall eliminate its customs duties on imports originating in the other Party upon entry into force of the Agreement.
4. For each good specified in Annex 2-A, the base rate of customs duties, to which the successive reductions are to be applied, shall be the MEN rate applied on 1st of January 2012.
5. Except as otherwise provided in this Agreement, a Party shall not increase any customs duty set as base rate in Annex 2-A, or adopt any new customs duty or charges having equivalent effect on a good originating in the other Party.
6. Upon request of a Party, the Parties shall consult in order to consider accelerating the elimination of customs duties set out in Annex 2-A.
7. Paragraph 5 shall not preclude any Party from:
(a) raising a customs duty to the level established in Annex 2-A, for the respective year, following an unilateral reduction; or
(b) maintaining or increasing a customs duty in accordance with the WTO
Understanding on Rules and Procedures Governing the Settlement of Disputes (hereinafter referred to as "DSU") or Chapter 12 (Dispute Settlement).
Section C. AGRICULTURAL GOODS
Article 2.15. SCOPE
1. This Section applies to the measures adopted or maintained by the Parties related to agricultural goods.
2. The term "agricultural goods" means, for the purposes of this Agreement, the goods falling within Chapters 01 to 24 of the Harmonized System (HS) and subheadings, 3501.90, 3502.11, 3502.19, 3502.20, 3502.90, 3505.10, 3505.20, 3823.11, 3823.12, 3823.13, 3823.19 and 3824.60.
3. For agricultural goods, the provisions of this Section shall prevail over the provisions of any other Section or Chapter of this Agreement.
Article 2.16. PREFERENTIAL TREATMENT FOR AGRICULTURAL GOODS
1. For those products originating in Israel listed in the Annex 2-B (Section 1-A and 1-B), customs duties shall be eliminated or reduced as indicated in the Annex.
2. For those products originating in Colombia listed in of the Annex 2-B (Section 2-A and 2-B), customs duties shall be eliminated or reduced as indicated in the Annex.
Article 2.17. ADMINISTRATION AND IMPLEMENTATION OF TARIFF-RATE QUOTAS
1. Each Party shall implement and administer tariff rate quotas for imports of agricultural goods set out in Annex 2-B in accordance with Article XII of GATT 1994, including its Interpretative Notes, and the Import Licensing Agreement.
2. Upon request of an exporting Party, an importing Party shall provide information to the exporting Party with respect to the administration of the tariff rate quotas of the importing Party.
Article 2.18. PRICE BAND SYSTEM
Except as otherwise provided in this Agreement, Colombia may apply the Andean Price Band
System established in Decision 371 of the Andean Community and its modifications, or subsequent systems for agricultural goods covered by such Decision.
Article 2. EXPORT SUBSIDIES AND OTHER EQUIVALENT EFFECT MEASURES
1. Upon entry into force of this Agreement, no Party shall maintain, introduce or reintroduce export subsidies or other measures with equivalent effect on agricultural goods included in Annex 2-B, and destined to the territory of the other Party.
2. If either Party maintains, introduces or re-introduces export subsidies on a product included in Annex 2-B, the importing party will ask by written request to the exporting party to initiate consultations in order to review whether or not there is an export subsidy. If after 90 days from the request for consultations, the export subsidy is confirmed and it is not suspended by the exporting party, and no mutually satisfactory solution is agreed upon, the importing Party may increase the rate of duty on imports to the tariff of Most Favored Nation (MEN), applied for the period in which the export subsidy is in force. For the extra tariff to be removed, the other Party shall provide detailed information demonstrating that the applied subsidy has been removed.
3. Export subsidies, as mentioned above, shall be defined in accordance with Article 9 to the WTO Agreement on Agriculture (or any successor agreement to which both Israel and Colombia are parties).
4. Any measure taken by one of the Parties under this Article should be carried out in accordance with its domestic legislation and its procedures should be consistent with the WTO rules.
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 regular stocking, feeding, protection from predators, etc;
chapters, headings and subheadings mean the chapters, the headings and the subheadings (two, four and six digit codes respectively) used in the nomenclature which makes up the Harmonized System (HS);
CIF Value means the value of the goods, including freight and insurance costs up to named port of destination either in the territories of the Parties;
classified / classification, refer(s) to the classification of a product or material under a particular heading or sub-heading;
consignment means products 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 value means the value as determined in accordance with Article VII of GATT 1994 and its interpretative notes, and the Customs Valuation Agreement;
ex-works price means the price paid for the product ex-works to the manufacturer in the territories of 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 product obtained is exported;
goods means both materials and products;
manufacture means any kind of working or processing, including assembly or specific operations;
material means any ingredient, raw material, component or part, etc., used in the manufacture of the product;
product means the product manufactured, even if it is intended for later use in another manufacturing operation;
value of non-originating materials means the CIF value or if it is not known its equivalent in accordance with Article VII of GATT 1994 and its Interpretative Notes and the Customs Valuation Agreement.
Article 3.2. GENERAL REQUIREMENTS
1. For the purpose of implementing this Agreement, the following products shall be considered as originating in the territory of Israel:
(a) products wholly obtained in the territory of Israel within the meaning of Article 3.4;
(b) products obtained in the territory of Israel incorporating materials which have not been wholly obtained there, provided that such materials have undergone sufficient working or processing in the territory of Israel within the meaning of Article 3.5.
2. For the purpose of implementing this Agreement, the following products shall be considered as originating in the territory of the Republic of Colombia:
(a) products wholly obtained in the territory of the Republic of Colombia within the meaning of Article 3.4;
(b) products obtained in the territory of the Republic of Colombia incorporating materials which have not been wholly obtained there, provided that such materials have undergone sufficient working or processing in the territory of the Republic of Colombia within the meaning of Article 3.5.
3. Products originating in the territories of the Parties have to satisfy all other applicable requirements under this Chapter.
Article 3.3. ACCUMULATION OF ORIGIN
1. Notwithstanding Article 3.2.1(b), goods originating in the territory of Israel shall be considered as materials originating in the territory of the Republic of Colombia and it shall not be necessary that such materials had undergone working or processing.
2. Notwithstanding Article 3.2.2(b), goods originating in the territory of the Republic of Colombia shall be considered as materials originating in the territory of Israel and it shall not be necessary that such materials had undergone sufficient working or processing.
3. Subject to paragraph 4, where each Party has a trade agreement that, as contemplated by the WTO Agreement, concerns the establishment of a free trade area with a non-Party, the territory of that non-Party shall be deemed to form part of the territory of the free trade area established by this Agreement, for purposes of determining whether a good is an originating good under this Agreement.
4. A Party shall apply paragraph 3 only where provisions having equivalent effect to those of paragraph 3 are in force between each Party and the non-Party with which each Party has separately concluded a free trade agreement. Where such provisions between a Party and the non-Party apply only to certain goods or under certain conditions, the other Party may limit the application of paragraph 3 to those goods and under such conditions, subject to the provisions of this Agreement.
Article 3.4. WHOLLY OBTAINED PRODUCTS
1. The following shall be considered as wholly produced or obtained in the territory of the Parties:
(a) mineral products extracted from the soil, subsoil or from the seabed of any of the Parties, including its territorial seas, contiguous zone, internal waters, continental shelf or exclusive economic zone;
(b) plants and vegetable products grown, collected, harvested there, including in their territorial seas, contiguous zone, internal waters, exclusive economic zone or continental shelf;
(c) live animals born and raised there, including by aquaculture;
(d) products from live animals as in subparagraph (c);
(e) animals and products obtained by hunting, trapping, collecting, fishing and capturing in a Party; including in its territorial seas, contiguous zone, internal waters, continental shelf or in the exclusive economic zone;
(f) used articles collected there fit only for the recovery of raw materials;
(g) waste and scrap resulting from utilization, consumption or manufacturing operations conducted there provided that such waste and scrap are fit only for recovery of raw materials;
(h) products of sea fishing and other products taken from the waters in the high seas (outside the continental shelf or in the exclusive economic zone of the Parties), only by their vessels;
(i) products of sea fishing obtained, only by their vessels under a specific quota or other fishing rights allocated to a Party by the international agreements to which the Parties are parties;
(j) products made aboard their factory ships exclusively from products referred to in subparagraphs (h) and (i);
(k) products obtained from the seabed and subsoil beyond the limits of national jurisdiction are considered to be wholly obtained in the Party that has exploitation rights under international law;
(l) goods produced in any of the Parties exclusively from the products specified in subparagraphs (a) to (g) above.
2. The terms "their vessels" and "their factory ships" in paragraphs 1(h), 1(i) and (j) shall apply only to vessels and factory ships:
(a) which are flagged and registered or recorded in a Party; and
(b) which are owned by a natural person with domicile in that Party or by a commercial company with domicile in that Party, established and registered in accordance with the law of that said Party and performing its activities in conformity with the law of that said Party.
Article 3.5. SUFFICIENTLY WORKED OR PROCESSED PRODUCTS
1. For the purpose of Articles 3.2.1(b) and Articles 3.2.2(b), a product is considered to be originating if the non-originating materials used in its manufacture undergo working or processing beyond the operations referred to in Article 3.6; and
(a) the production process results in a tariff change of the non-originating materials from a four-digit heading of the Harmonized System (HS) into another four-digit heading; or
(b) the value of all non-originating materials used in its manufacture does not exceed 50% of the ex-works price; or
(c) if the product falls within the classifications included in the list in Annex 3-A on Product Specific Rules of Origin (hereinafter referred to as PSR), subparagraphs (a) and (b) above shall not apply. In this case it must fulfill the specific rule detailed therein.
2. A product will be considered to have undergone a change in tariff classification pursuant to subparagraphs 1(a) and l(c) above 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 product.
3. The Joint Committee may modify Annex 3-A by mutual agreement.
Article 3.6. MINOR PROCESSING OPERATIONS
1. Without prejudice to paragraph 2, the following operations shall be considered as minor processing and shall be insufficient to confer the status of originating goods, whether or not the requirements of Article 3.5 are satisfied:
(a) preserving operations to ensure that the products remain in good condition during transport and storage;
(b) simple changing of packaging, breaking-up and assembly of packages;
(c) washing, cleaning, removal of dust, oxide, oil, paint or other coverings;
(d) simple painting and polishing operations, including applying oil;
(e) husking, partial or total bleaching, polishing, and glazing of cereals and tice;
fh ironing or pressing of textiles;
(g) operations to colour or flavor sugar or form sugar lumps partial or total milling of crystal sugar;
(h) peeling, stoning and shelling, of fruits, nuts and vegetables;
(i) sharpening, simple grinding or simple cutting;
(j) sifting, screening, sorting, classifying, grading, matching (including the making-up of sets of articles);
(k) affixing marks, labels, logos and other similar distinguishing signs on products or their packaging;
(l) diluting in water or other substances, provided that the characteristics of the product remain unchanged;
(m) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;
(n) simple assembly of parts of articles to constitute a complete article or disassembly of products into parts ;
(o) simple mixing of products, whether or not of different kinds, simple mixing of sugar with any material;
(p) slaughter of animals; and
(q) a combination of two or more of the operations specified in subparagraphs (a) to (p).
2. All operations carried out either in territory of the Republic of Colombia or in the territory of Israel on a given product shall be considered together when determining whether the working or processing undergone by that product is to be regarded as insufficient within the meaning of paragraph 1.
Article 3.7. UNIT OF QUALIFICATION
1. The unit of qualification for the application of the provisions of this Chapter shall be that of the particular product which is considered as the basic unit when determining classification using the nomenclature of the Harmonized System (HS).
It follows that:
(a) when a product composed of a group or assembly of articles is classified under the terms of the Harmonized System (HS) in a single heading, the whole constitutes the unit of qualification; and
(b) when a consignment consists of a number of identical products classified under the same heading of the Harmonized System (HS), each product must be taken individually when applying the provisions of this Chapter.
2. Where, under General Rule 5 of the Harmonized System (HS), packaging is included with the product for classification purposes, it shall be included for the purposes of determining origin.
3. When the products qualify as wholly obtained according to Article 3.4, the packaging shall not be taken into consideration for the purposes of determining origin.
Article 3.8. ACCOUNTING SEGREGATION
1. For the purpose of establishing if a product is originating when in its manufacture are utilized originating and non-originating fungible materials, mixed or physically combined, the origin of such materials can be determined by any of the inventory management methods applicable in the Party.
2. Where considerable cost or material difficulties arise in keeping separate stocks of originating and non-originating materials which are identical and interchangeable, the so-called "accounting segregation" method may be used for managing such stocks.
3. This method must be able to ensure that the number of products obtained which could be considered as "originating" is the same as that which would have been obtained if there had been physical segregation of the stocks.
4. This method is recorded and applied on the basis of the general accounting principles applicable in the Party where the product was manufactured.
5. The user of this method may issue or apply for proofs of origin providing information about the inventory management method used, as the case may be, for the quantity of products which may be considered as originating. The management method selected for a particular fungible material or material shall continue to be used for that good or material throughout the fiscal year of the person that selected the inventory management method.
Article 3.9. ACCESSORIES, SPARE PARTS AND TOOLS
Accessories, spare parts and tools dispatched with a piece of equipment, machine, apparatus or vehicle, which are part of the normal equipment and included in the price thereof or which are not separately invoiced, shall be regarded as one with the piece of equipment, machine, apparatus or vehicle in question.
Article 3.10. SETS
Sets, as defined in General Rule 3 of the Harmonized System (HS), shall be regarded as originating when all component goods are originating. Nevertheless, when a set is composed of originating and non-originating goods, the set as a whole shall be regarded as originating, provided that the CIF value of the non-originating goods does not exceed 15% of the ex-works price of the set.
Article 3.11. NEUTRAL ELEMENTS
In order to determine whether a product originates, it shall not be necessary to determine the origin of the following which might be used in its manufacture:
(a) energy and fuel;
(b) plant and equipment;
(c) machines and tools; and
(d) goods which do not enter into the final composition of the product.
Article 3.12. PRINCIPLE OF TERRITORIALITY
1. Except as provided in paragraph 3, the conditions for acquiring originating status set out in Article 3.5 must be fulfilled without interruption in the territory of Israel or in the territory of the Republic of Colombia.
2. Where originating goods exported from the territory of Israel or from the territory of the Republic of Colombia 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 authorities that:
(a) the returning goods are the same as those exported; and
(b) the non-Party 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, goods listed in Annex 3-F shall be considered originating goods in accordance with Annex 3-F, even if such goods have undergone operations and processes outside the territories of the Parties.
Article 3.13. DIRECT TRANSPORT
1. The preferential treatment provided for under this Agreement applies only to products, satisfying the requirements of this Chapter, which are transported directly between the territories of the Parties. However, products originating in the terrritories of the Parties and constituting one single consignment which is not split up may be transported through the territory of a non-Party with, should the occasion arise, transhipment or temporary warehousing in such territories, provided that the goods have remained under the surveillance of the customs authorities in the country of transit or temporary warehousing; and
(a) the transit entry is justified for geographical reasons or by consideration related exclusively to transport requirements; and
(b) they are not intended for trade, consumption, use or employment in the non-Party where the goods were in transit; and
(c) they do not undergo operations other than unloading, reloading or any operation designed to preserve them in good condition.
2. Evidence that the conditions set out in paragraph 1 have been fulfilled shall be supplied, upon request, to the customs authorities of the importing Party by the submission of:
(a) any single through transport documents, that meets international standards and that proves that the goods were directly transported from the exporting Party through the non-Party where the goods are in transit to the importing Party; or
(b) a certificate issued by the customs authorities of the non-Party where the goods were in transit, which contains an exact description of the goods, the date and place of loading and re-loading of the goods in that non-Party and the conditions under which the goods were placed; or
(c) in the absence of any of the above documents, any other documents that will prove the direct shipment.
3. Notwithstanding paragraphs 1 and 2, within one year from the entry into force of this Agreement, the Parties shall discuss the possibility of a mechanism for allowing that an originating good, which is transshipped through the territory of a non-Party with which each Party has entered separately into a free trade agreement under Article XXIV of GATT 1994 and its Interpretative Notes, will not lose its originating status.
Article 3.14. EXHIBITIONS
1. Originating goods, sent for exhibition in a non-Party other than the territory of either Party and sold after the exhibition for importation in the territory of either Party shall benefit on importation from the provisions of this Agreement provided it is shown to the satisfaction of the customs authorities that:
(a) an exporter has consigned these goods from the territory of either Party to the non-Party in which the exhibition is held and has exhibited them there;
(b) the goods have been sold or otherwise disposed of by that exporter to a person in the teritory of either Party;
(c) the goods have been consigned during the exhibition or immediately thereafter in the non-Party to which they were sent for exhibition; and
(d) the goods have not, since they were consigned for exhibition, been used for any purpose other than demonstration at the exhibition.
2. A proof of origin must be issued or made out in accordance with the provisions of this Chapter and submitted to the customs authorities of the importing Party in the normal manner. The name and address of the exhibition must be indicated thereon. Where necessary, additional documentary evidence of the conditions under which the products have been exhibited may be required.
3. Paragraph 1 shall apply to any trade, industrial, agricultural or crafts exhibition, fair or similar public show or display which is not organized for private purposes in shops or business premises with a view to the sale of foreign goods, and during which the goods, remain under customs control.