(i) for UAE, the Ministry of Economy or any other agency notified from time to time; and
(ii) for Malaysia, the Ministry of Investment, Trade and Industry or any other agency notified from time to time;
(c) customs value means the value as determined in accordance with the Customs Valuation Agreement;
(d) consignment means goods which are either sent simultaneously from one exporter to one consignee or covered by a single transport document covering their shipment from the exporter to the consignee or, in the absence of such a document, by a single invoice;
(e) generally accepted accounting principles means the recognised consensus or substantial authoritative support in the territory of a Party, with respect to the recording of revenues, expenses, costs, assets, and liabilities, the disclosure of information, and the preparation of financial statements. These standards may encompass broad guidelines of general application as well as detailed standards, practices and procedures;
(f) goods mean any merchandise, article, material or any product that is obtained by growing, raising, mining, harvesting, fishing, aquaculture, trapping, hunting, extracting or manufactured, even if it is intended for later use in another manufacturing operation;
(g) manufacture means any kind of working or processing, including assembly orspecific operations;
(h) material means any ingredient, raw material, compound or part used in the productionof a good;
(i)non-originating goods or non-originating material means goods or materials that do not qualify as originating in accordance with this Chapter;
(j) originating goods or originating material means goods or materials that qualify as originating in accordance with this Chapter; and
(k) production means methods of obtaining goods including manufacture, growing, raising, mining, harvesting, fishing, aquaculture, trapping, hunting.
Section A. ORIGIN DETERMINATION
Article 7.2. Originating Goods
1. For the purpose of implementing this Agreement, goods shall be deemed originating in territory of a Party, if the goods are -
(a) wholly obtained there in accordance with Article 7.3;
(b) produced there exclusively from originating materials; or
(c) obtained there incorporating materials which have not been wholly obtained there provided that such materials have undergone sufficient working or processing there in accordance with Article 7.42. In each case provided in paragraph 1, the goods shall satisfy all other applicable requirements of this Chapter.
Article 7.3. Wholly Obtained Goods
For the purposes of Article 7.2.1 (a), the following goods shall be deemed to be wholly obtained or produced in the territory of a Party:
(a) plants and plant goods grown, collected or harvested there;
(b) live animals born and raised there;
(c) goods obtained from live animals there;
(d) mineral goods or natural resources extracted or taken from that Party's soil, subsoil, waters, seabed or beneath the seabed;
(e) goods obtained by hunting, trapping, collecting, capturing, fishing or aquaculture conducted there;
(f) goods of sea fishing and other marine goods taken from outside the territorial waters of the Parties by a vessel registered, recorded, listed or licensed with a Party and flying its flag;
(g) goods made on board a factory ship registered, recorded, listed or licensed with a Party and flying its flag, exclusively from goods referred to in subparagraph (h);
(h) goods, other than goods of sea fishing and other marine goods, taken or extracted from the seabed, ocean floor or the subsoil of the continental shelf or the exclusive economic zone of any of the Parties, provided that the Party has the right to exploit such seabed, ocean floor, or subsoil in accordance to international law;
(i) raw materials recovered from used goods collected there, which can no longer perform their original purpose and are fit only for the recovery of raw materials;
(j) wastes and scraps resulting from utilization, consumption or manufacturing operations conducted there provided that such goods are fit only for the recovery of raw materials; and
(k) goods produced or obtained there exclusively from goods referred to in subparagraphs (a) through (j).
Article 7.4. Sufficient Working or Processing
1.For the purposes of Article 7.2 (1)(c), a good shall be considered to have undergone sufficient working or processing and shall deemed to be originating in a Party when the good satisfy any of the following:
(a) a Change in Tariff Heading (CTH), which means that all non-originating materials used in the production of the good have undergone a change in HS tariff classification at the 4-digit level; or
(b) a Qualifying Value Content (QVC) not less than 35% of the Ex-Works value; or
(c) For goods that fall within the HS codes included in the list of Product Specific Rules (PSR) in Annex 3A (Product Specific Rules), the goods shall satisfy the specific rule pertaining to them detailed therein.
2. For the purposes of paragraph 1, the QVC shall be calculated as follows:
QVC = Ex-Works Price - V.N.M. / Ex-Works Price * 100
where:
Qualified value Content (QVC) is the qualifying value content of a good expressed as a percentage;
Ex-Works Price is the price paid for the good ex-works to the manufacturer in the Party in whose undertaking the last working or processing is carried out, provided the price includes the value of all the materials used, minus any internal taxes which are, or may be, repaid when the good obtained is exported;
value of non-originating materials (V.N.M.) means:
(a) the customs value at the time of importation of the non-originating materials used, inclusive of freight and insurance costs incurred in transporting the material to the importation port in the territory of the Party where the producer of the good is located or, if this is not known and cannot be ascertained, the first ascertainable price paid for the materials in the exporting Party.
(b) Where the producer of a good acquires non-originating materials in the territory of the Party where the producer is located, the value of such materials shall not include freight, insurance, packing costs and any other costs incurred in transporting the material from the supplier's warehouse to the producer's location.
Article 7.5. Intermediate Goods
If a good which has obtained originating status in a Party in accordance with Article 7.4 is used as a material in the manufacture of another good, no account shall be taken of the non-originating materials which may have been used in its manufacture.
Article 7.6. Accumulation
1. An originating good of a Party which is used in the processing or production in the territory of the other Party as material for finished goods shall be deemed as a material originating in the territory of the latter Party where the working or processing of the finished goods has taken place.
2. Notwithstanding paragraph 1, an originating good of a Party that does not undergo processing beyond the insufficient working or processing operations listed in Article 7.8 in the other Party shall retain its originating status of the former Party.
3.The Joint Committee may agree to review this Article with a view to providing for other forms of accumulation for the purpose of qualifying goods as originating goods under this Agreement.
Article 7.7. Tolerance
1. Notwithstanding Article 7.4, a good will be considered to have undergone a change in tariff classification if the value of all non-originating materials that are used in the production of the good and that do not undergo the applicable change in tariff classification does not exceed 20% of the Ex-Works price of the good.
2. The value of non-originating materials referred to in paragraph 1 shall be included in the value of the non-originating materials for any applicable QVC requirement.
Article 7.8. Insufficient Working or Processing
1. Whether or not the requirements of Article 7.4 are satisfied, a good shall not be considered to be originating in the territory of a Party if the following operations are undertaken exclusively by itself or in combination in the territory of that Party:
(a) slaughter of animals;
(b) operations to ensure the preservation of goods in good condition during transport and storage such as drying, freezing, ventilation, chilling and like operations;
(c) sifting, washing, cutting, slitting, bending, coiling or uncoiling, sharpening, simple grinding, slicing;
(d) cleaning, including removal of oxide, oil, paint or other coverings;
(e) simple painting and polishing operations;
(f) testing or calibration;
(g) placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and packaging operations;
(h) simple mixing of goods, whether or not of different kinds;
(i) simple assembly of parts of goods to constitute a complete good or disassembly of goods into parts;
(j) changes of packing, unpacking or repacking operations, and breaking up and assembly of consignments;
(k) affixing or printing marks, labels, logos and other like distinguishing signs on goods or their packaging;
(l) husking, partial or total bleaching, polishing and glazing of cereals and rice; and
(m) mere dilution with water or another substance that does not materially alter the characteristics of the goods.
2. For the purposes of paragraph 1, the term "simple" will be defined as following:
(a) simple generally describes an activity which does not need special skills, machines, apparatus or equipment especially produced or installed for carrying out the activity; and
(b) simple mixing generally describes an activity which does not need special skills, machine, apparatus or equipment especially produce or install for carrying out the activity. However, simple mixing does not include chemical reaction. Chemical reaction means a process (including a biochemical process) which results in a molecule with a new structure by breaking intramolecular bonds and by forming new intramolecular bonds, or by altering the spatial arrangement of atoms in a molecule.
Article 7.9. Indirect Materials
In order to determine whether a good is an originating good, no account shall be taken of the origin of the following which might be used in its manufacture:
(a) energy and fuel;
(b) plant and equipment;
(c) machines and tools; and
(d) other materials or goods used in the production, testing or inspection of a good and do not enter and which are not intended to enter into the final composition of the good.
Article 7.10. Accessories, Spare Parts, Tools
1. Accessories, spare parts, tools, and instructional or other information materials delivered with a good that form part of the good's standard accessories, spare parts, tools, and instructional or other information materials shall be regarded as a part of the good, and shall be disregarded in determining whether or not all the non-originating materials used in the production of the originating goods undergo the applicable change in tariff classification provided that -
(a) the accessories, spare parts, tools, and instructional or other information materials are classified with and not invoiced separately from the good; and
(b) the quantities and value of the accessories, spare parts, tools, and instructional or other information materials presented with the good are customary for the good.
2. Notwithstanding paragraph 1, for goods that are subject to QVC requirement, the value of the accessories, spare parts, tools and instructional or other information materials shall be taken into account as originating or non-originating materials, as the case may be, in calculating the qualifying value content of the goods.
Article 7.11. Packaging Materials and Containers for Retail Sale
1. Each Party shall provide that packaging materials and containers in which a good is packaged for retail sale, if classified with the good, according to Rule 5 of the General rules for the interpretation of the Harmonized System, shall be disregarded in determining whether all the non-originating materials used in the production of the good undergo the applicable change in tariff classification.
2. If the good is subject to qualifying value content requirement, the value of such packaging materials and containers shall be taken into account as originating or non-originating materials, as the case may be, in calculating the qualifying value content of the good.
Article 7.12. Unit of Qualification
The unit of qualification for the application of the provisions of this Chapter shall be the particular goods which are considered as the basic unit when determining classification using the nomenclature of the Harmonized System. Accordingly, it follows that -
(a) when a good composed of a group or assembly of articles is classified under a single heading, the whole constitutes the unit of qualification;
(b) when a consignment consists of a number of identical goods classified under the same heading, each good shall be taken individually into account when determining whether it qualifies as an originating good.
Article 7.13. Packaging Materials and Containers for Transportation and Shipment
Each Party shall provide that packing materials and containers for transportation and shipment are disregarded in determining whether a good is originating.
Article 7.14. Fungible Goods and Materials
1. Each Party shall provide that the determination of whether fungible goods or materials are originating shall be made through physical segregation of each good or material, or, in case of any difficulty, through the use of any inventory management method, such as averaging, last-in, first-out, or first-in, first-out, recognised in the generally accepted accounting principles of the Party in which the production is performed, or otherwise accepted by the Party in which the production is performed.
2. Each Party shall provide that an inventory management method selected under paragraph 1 for particular fungible goods or materials shall continue to be used for those fungible goods or materials throughout the fiscal year of the Party that selected the inventory management method.
Article 7.15. Sets of Goods
Sets, as defined in General Rule 3 of the Harmonized System (HS), shall be regarded as originating when all component goods are originating. However, when a set is composed of originating and non-originating goods, the set as a whole shall be regarded as originating, provided that the value of non-originating goods does not exceed 15% of the Ex-Works price of the set.
Section B. TERRITORIALITY AND TRANSIT
Article 7.16. Principle of Territoriality
1. The conditions for acquiring originating status set out in Article 7.2 must be fulfilled without interruption in the territory of the Party concerned.
2. Where originating goods exported from the territory of a Party to a non-party, return to the exporting Party, they must be considered as non-originating, unless it can be demonstrated to the satisfaction of the Customs Authority that -
(a) the returning goods are the same as those exported; and
(b) they have not undergone any operation beyond that necessary to preserve them in good condition while in that non-party or while being exported.
3. The acquisition of originating status set out in Article 7.2 shall not be affected by working or processing done outside a Party on materials exported from this Party and subsequently re-imported there, provided -
(a) the said materials are wholly obtained in the exporting Party or have undergone working or processing beyond the operations referred to in Article 7.8 prior to being exported; and
(b) it can be demonstrated to the satisfaction of the Customs Authority that -
(i) the re-imported goods have been obtained by working or processing the exported materials; and
(ii) the total added value acquired outside a Party by applying this Article does not exceed 15% (1) of the Ex-Works price of the end goods for which originating status is claimed.
4. For the purposes of paragraph 3, the conditions for obtaining originating status set out in Section A shall not apply to working or processing done outside the exporting Party. However, where a QVC rule is applied in determining the originating status of the end good, the total added value incorporated in the territory of the exporting Party, taken together with the total added value acquired outside this Party by applying this Article, shall not exceed the stated QVC percentage.
5. Paragraphs 3 and 4 shall not apply to goods which do not fulfil the conditions set out in Article 7.4 or which can be considered sufficiently worked or processed only if the general tolerance of Article 7.7 is applied.
6. Factual information relevant to this Article will be indicated in the Certificate of Origin, in accordance with Annex 7B (Certificate of Origin).
7. For the purposes of applying paragraph 3 (b)(ii), "total added value" shall be taken to mean all costs arising outside the exporting Party, including the value of the materials incorporated there.
8. Any working or processing of the kind covered by this Article and done outside the exportingParty shall be done under the outward processing arrangements, or similar arrangements.
Article 7.17. Transit and Transshipment
1. Each Party shall provide that an originating good retains its originating status if the good has been transported directly to the importing Party without passing through the territory of a non-Party.
2. Notwithstanding paragraph 1, each Party shall provide that an originating good retains its originating status if transited or is stored in a temporary warehousing through one or more non-parties, provided that the good -
(a) remained under customs or relevant authorities control in the territory of the non-party or non-parties of transit or storage; and
(b) has not undergone any operation there other than unloading, reloading, adding or affixing labels to ensure compliance with specific domestic requirements of the importing Party, splitting of consignments, or any operation required to keep them in good condition, all of which shall be carried out under Customs Authority or relevant authorities' supervision in the non-party of transit or storage.
3. An importer shall upon request supply appropriate evidence to the Customs Authority of the importing Party demonstrating that the goods remained under customs supervision in the non-party or non-parties of transit or storage, and notably by -
(a) contractual transport documents such as bills of lading;
(b) factual or concrete evidence based on marking or numbering of packages;
(c) a certificate of non-manipulation provided by the Customs Authority of the non-party or non-parties of transit or splitting, or any other documents demonstrating that the goods remained under customs supervision in the non-party or non-parties of transit or splitting; or(d)any evidence related to the goods themselves.
Article 7.18. Free Economic Zones or Free Zones
1. Both Parties shall take all necessary steps to ensure that originating goods traded under cover of a proof of origin which in the course of transport use a free zone situated in their territory, are not substituted by other goods and do not undergo handling other than normal operations designed to prevent their deterioration.
2. Goods produced or manufactured in a free zone situated within a Party shall be considered as originating goods in that Party when exported to the other Party provided that the treatment or processing is in conformity with the provisions of this chapter and supported by a proof of origin.
Article 7.19. Third Party Invoicing
1. The Customs Authority in the importing Party shall not deny a claim for preferential tariff treatment only for the reason that the invoice was not issued by the exporter or producer of a good, provided that the good meets the requirements in this Chapter.
2. The exporter of the goods shall indicate "third party invoicing" and such information as name and country of the company issuing the invoice, if known, shall appear in the appropriate field as detailed in Annex 7B (Certificate of Origin) or, in the case of an origin declaration made out by an approved exporter as per Article 7.23, on the origin declaration.
Section C. ORIGIN CERTIFICATION
Article 7.20. Proof of Origin
1. Goods originating in a Party shall, on importation into the other Party, benefit from preferential tariff treatment under this Agreement on the basis of a Proof of Origin.
2. Any of the following shall be considered as a Proof of Origin:
(a) a paper format certificate of origin issued by a Competent Authority as per Article 7.21;
(b) an Electronic Certificate of Origin (E-Certificate) issued by a Competent Authority and exchanged by a mutually developed electronic system as per Article 7.22; or
(c) an origin declaration made out by an approved exporter as per Article 7.23.
3. Each Party shall provide that a Proof of Origin shall be completed in the English language and shall remain valid for one year from the date on which it is issued.
Article 7.21. Certificate of Origin In Paper Format
1.A Certificate of Origin in paper format shall -
(a) be in standard A4 white paper as per the attached Form set out in Annex 7B (Certificate of Origin);
(b) comprise one original and two copies. The original shall be forwarded by the producer or exporter to the importer for submission to the Customs Authority of the importing Party. The duplicate shall be retained by the Competent Authority of the exporting Party. The triplicate shall be retained by the producer or exporter;
(c) may cover one or more goods under one consignment; and(d)be in a printed format or such other medium including electronic format.
2. Each Certificate of Origin shall bear a unique serial reference number separately given by each place or office of issuance.
3. A Certificate of Origin shall bear an official seal of the Competent Authority. The official seal may be applied electronically.
4.In case the official seal is applied electronically, an authentication mechanism, such as QR code or a secured website, shall be included in the certificate for the certificate to be deemed as an original copy.
Article 7.22. Electronic Data Origin Exchange System
For the purposes of Article 7.20.2(b), the Parties shall endeavour to develop an electronic system for origin information exchange to ensure the effective and efficient implementation of this Chapter particularly on transmission of electronic certificate of origin. At every meeting of the Sub Committee on Trade in Goods, the Parties shall review their readiness to implement the Electronic Data Origin Exchange System.
Article 7.23. Origin Declaration
1. For the purposes of Article 7.20.2 (c) the Parties shall, within one year from the date of entry into force of this Agreement, implement provisions allowing each Competent Authority to recognize an origin declaration made by an approved exporter.
2. The Customs Authority or Competent Authority of the exporting Party may authorise any exporter (hereinafter referred to as "approved exporter") who exports goods under this Agreement, to make out Origin Declarations, a specimen of which appears in Annex 7C (Origin Declaration), irrespective of the value of the goods concerned.
3. An exporter seeking such authorisation must offer to the satisfaction of the Customs Authority or Competent Authority of the exporting Party all guarantees necessary to verify the originating status of the goods as well as the fulfilment of the other requirements of this Chapter.
4. The Customs Authority or Competent Authority of the exporting Party may grant the status of approved exporter, subject to any conditions which they consider appropriate.