1. The Parties shall ensure that their respective authorities cooperate on customs matters in order to ensure that the objectives set out in Article 4.1 are attained.
2. The Parties shall cooperate, among others, through:
(a) exchanging information concerning their customs laws and regulations and their implementation, and customs procedures, particularly in the following areas:
(i) simplification and modernisation of customs procedures;
(ii) border enforcement measures applied by their customs authorities;
(iii) facilitation of transit movements and transhipment;
(iv) dialogue with the business community; and
(v) supply chain security and risk management;
(b) working together on the customs-related aspects of securing and facilitating the international trade supply chain in accordance with the SAFE Framework of Standards, including with respect to their AEO programmes and their mutual recognition referred to in Article 4.8;
(c) considering developing joint initiatives relating to import, export, other customs procedures and trade facilitation including technical assistance;
(d) strengthening their cooperation in the field of customs in international organisations such as the WTO and the World Customs Organization (hereinafter referred to as "WCO");
(e) establishing minimum standards, to the extent practicable, for risk-management techniques and related requirements and programmes; if relevant and appropriate, the Parties shall also consider mutual recognition of risk-management techniques, risk standards and security controls;
(f) endeavouring to harmonise their data requirements for import, export and other customs procedures by implementing common standards and data elements in accordance with the WCO Data Model; and
(g) maintaining a dialogue between their respective policy experts to promote the utility, efficiency and applicability of advance rulings.
3. The Parties shall provide each other with mutual administrative assistance in customs matters in accordance with the provisions of the Annex on Mutual Administrative Assistance in Customs Matters adopted by the Decision No 5/2004 of the EU-Mexico Joint Council of 15 December 2004, which is hereby incorporated and made part of this Agreement. Any exchange of information between the Parties in accordance with this Chapter shall be subject to the confidentiality of information and personal data protection requirements provided for in Article 10 of that Annex, mutatis mutandis, and to any confidentiality and privacy requirements provided for in the respective laws and regulations of the Parties.
ARTICLE 4.12
Single Window
1. Each Party shall endeavour to develop or maintain single window systems to facilitate a single electronic submission of all information required by customs and other legislation for the import, export and transit of goods.
2. The Parties shall endeavour to work together towards the interoperability and streamlining of their single window systems, including by sharing their respective experiences in developing and deploying their single window systems.
ARTICLE 4.13
Transit and Transhipment
1. Each Party shall ensure the facilitation and effective control of transit movements and transhipment operations through its territory.
2. Each Party shall endeavour to promote and implement regional transit arrangements with a view to facilitating trade between the Parties.
3. Each Party shall ensure that all concerned authorities and agencies in its territory cooperate and coordinate to facilitate traffic in transit.
4. Each Party shall allow goods intended for import to be moved under customs control from a customs office of entry to another customs office in its territory from where the goods would be released or cleared.
ARTICLE 4.14
Post-Clearance Audit
1. With a view to expediting the release of goods, each Party shall adopt or maintain post‑clearance audit to ensure compliance with its customs laws and regulations.
2. Each Party shall conduct post-clearance audits in a risk-based manner.
3. Each Party shall conduct post-clearance audits in a transparent manner. If an audit is conducted and conclusive results have been achieved, the Party shall notify, without delay, the person whose record is audited of the results, the reasons for the results and the rights and obligations of the audited person.
4. The Parties acknowledge that the information obtained in a post-clearance audit may be used in further administrative or judicial proceedings.
5. The Parties shall, to the extent practicable, use the result of a post-clearance audit in applying risk management.
ARTICLE 4.15
Customs Brokers
1. A Party shall not require in its customs laws and regulations the mandatory use of customs brokers.
2. Each Party shall publish its measures on the use of customs brokers.
3. Each Party shall apply transparent and objective rules if and when licensing customs brokers.
ARTICLE 4.16
Preshipment Inspections
A Party shall not require the mandatory use of pre-shipment inspections as defined in the WTO Agreement on Preshipment Inspection, in relation to tariff classification and customs valuation 20 .
ARTICLE 4.17
Sub-Committee on Customs, Trade Facilitation and Rules of Origin
1. The Sub-Committee on Customs, Trade Facilitation and Rules of Origin shall report to the Joint Committee.
2. The Sub-Committee on Customs, Trade Facilitation and Rules of Origin established pursuant to Article 1.10 (Sub-Committees and Other Bodies of Part III of this Agreement) shall ensure the proper functioning of this Chapter, Chapter 3 (Rules of Origin and Origin Procedures), the Annex on Mutual Administrative Assistance in customs matters referred to in Article 4.11.3 and any additional customs-related provisions agreed between the Parties, and examine all matters arising from their application.
3. The Sub-Committee shall:
(a) prepare appropriate recommendations, as necessary, to the Joint Committee on:
(i) the implementation and administration of Chapter 3 (Rules of Origin and Origin Procedures); and
(ii) any amendments to Chapter 3 (Rules of Origin and Origin Procedures);
(b) adopt explanatory notes to facilitate the implementation of Chapter 3 (Rules of Origin and Origin Procedures);
(c) monitor the implementation and administration of this Chapter;
(d) provide a forum to consult and discuss all matters concerning customs, including in particular customs procedures, customs valuation, tariff regimes, customs nomenclature, customs cooperation and mutual administrative assistance in customs matters;
(e) provide a forum to consult and discuss matters relating to rules of origin, origin procedures and administrative cooperation;
(f) enhance cooperation on the development, application and enforcement of customs procedures, mutual administrative assistance in customs matters, rules of origin, origin procedures and administrative cooperation; and
(g) consider any other matter related to this Chapter or Chapter 3 (Rules of Origin and Origin Procedures) as the Parties may agree.
4. The Sub-Committee on Customs, Trade Facilitation and Rules of Origin may examine the need for, and prepare for the Joint Council, decisions or recommendations on all matters arising from the implementation of this Chapter. The Joint Council shall have the power to adopt decisions on the implementation of this Chapter as appropriate, including in what concerns AEO programmes and their mutual recognition, joint initiatives relating to customs procedures and trade facilitation, and technical assistance.
5. The Parties may agree to hold ad hoc meetings for matters concerning customs cooperation, rules of origin or mutual administrative assistance.
Chapter 5. TRADE REMEDIES
SECTION A
Anti-Dumping and Countervailing Measures
ARTICLE 5.1
General Provisions
1. The Parties affirm their rights and obligations under Article VI of GATT 1994, the Anti-Dumping Agreement and the SCM Agreement.
2. For the purposes of the application of provisional and definitive measures, the origin of the goods concerned shall be determined in accordance with the non-preferential rules of origin of each Party.
ARTICLE 5.2
Transparency and Due Process
1. Each Party shall conduct its procedures and apply anti-dumping and countervailing measures in a fair and transparent manner, in accordance with the relevant provisions of the Anti-Dumping Agreement and the SCM Agreement.
2. Each Party shall inform all interested parties, at a preliminary stage of the proceedings, and in any event before a final determination is made, of the essential facts under consideration, which form the basis for the decision whether to apply final measures. This is without prejudice to Article 6.5 of the Anti-Dumping Agreement and Article 12.4 of the SCM Agreement.
3. Each Party shall grant each interested party in an anti-dumping or countervailing duty investigation, full opportunity to defend its interests, provided it does not unduly delay the conduct of the investigation.
4. The definition of interested parties provided for in Article 6.11 of the Anti-Dumping Agreement and Article 12.9 of the SCM Agreement applies.
ARTICLE 5.3
Imposition of Anti-Dumping and Countervailing Duties
The decision whether the amount of the anti-dumping or countervailing duty to be imposed shall be the full margin of dumping or amount of subsidy, or a lesser amount, is to be made by the authorities of the importing Party in accordance with the law of that Party.
ARTICLE 5.4
Final Determination
A Party shall, when making a final determination, take into account the information duly provided by all interested parties considered as such in accordance with its law.
ARTICLE 5.5
Non-Application of Dispute Settlement
A Party shall not have recourse to dispute settlement under Chapter 31 (Dispute Settlement) concerning the interpretation or application of the provisions of this Section.
SECTION B
Global Safeguard Measures
ARTICLE 5.6
General Provisions
Each Party retains its rights and obligations pursuant to Articles XIX of GATT 1994 and 5 of the Agreement on Agriculture as well as under the Safeguards Agreement.
ARTICLE 5.7
Transparency
1. Notwithstanding Article 5.6, the Party initiating a global safeguard investigation or intending to impose global safeguard measures shall immediately provide, at the request of the other Party and provided the latter has a substantial interest, ad hoc written notification of all relevant information leading to the initiation of the global safeguard investigation or the imposition of global safeguard measures, including on the provisional findings, where relevant. This is without prejudice to Article 3.2 of the Agreement on Safeguards.
2. A Party imposing global safeguard measures shall endeavour to impose them in a way that least affects bilateral trade.
3. For the purposes of paragraph 2, if a Party considers that the legal requirements for the imposition of definitive safeguard measures are met, and intends to impose such measures, it shall notify the other Party and give the possibility to hold bilateral consultations. If no satisfactory solution has been reached within 30 days after the notification, the importing Party may adopt the definitive safeguard measure appropriate to remedy the problem.
4. For the purposes of this Article, a Party is deemed to have a substantial interest if it is among the five largest suppliers of the imported good during the most recent three-year period, measured in terms of either absolute volume or value.
ARTICLE 5.8
Non-Application of Dispute Settlement
A Party shall not have recourse to dispute settlement under Chapter 31 (Dispute Settlement) concerning the interpretation or application of the provisions of this Section referring to rights and obligations under the WTO Agreement.
SECTION C
Bilateral Safeguard Measures
SUB-SECTION C.1
General Provisions
ARTICLE 5.9
Definitions
For the purposes of Section C:
(a) "competent investigating authority" means:
(i) in the case of the European Union, the European Commission; and
(ii) in the case of Mexico, the "Unidad de Prácticas Comerciales Internacionales de la Secretaría de Economía" (International Trade Practices Unit of the Ministry of the Economy), or its successor;
(b) "domestic industry" means, with respect to an imported product, the producers as a whole of the like or directly competitive products operating within the territory of a Party, or those producers whose collective output of the like or directly competitive products constitutes a major proportion of the total domestic production of those products;
(c) "like product" means a product which is identical, that is alike in all respects, to the product under consideration, or in the absence of such product, another product which, although not alike in all respects, has characteristics closely resembling those of the product under consideration;
(d) "directly competitive product" means a product which may not be alike in all respects, but has a high degree of substitutability with the product under consideration as it fulfils the same functions 21 ;
(e) "serious injury" means a significant overall impairment of the position of a domestic industry;
(f) "threat of serious injury" means serious injury that, based on facts and not merely on allegation, conjecture or remote possibility, is clearly imminent; and
(g) "transition period" means:
(i) a period of 10 years from the date of entry into force of this Agreement; or
(ii) the tariff elimination period for the goods set out in the tariff elimination schedule of a Party in Annex 2-A (Tariff Elimination Schedule), provided the tariff elimination period for the good concerned is 10 or more years, plus three years.
ARTICLE 5.10
Application of a Bilateral Safeguard Measure
1. Notwithstanding Section B, if as a result of the reduction or elimination of a customs duty under this Agreement, an originating good of a Party is being imported into the territory of the other Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to the domestic industry that produces like or directly competitive products, the importing Party may impose the measures provided for in paragraph 2 under the conditions and in accordance with the procedures established in this Section.
2. If the conditions in paragraph 1 are met, the importing Party may only impose bilateral safeguard measures which:
(a) suspend the further reduction of the rate of customs duty on the product concerned as provided for under this Agreement; or
(b) increase the rate of customs duty on the product concerned to a level which does not exceed the lesser of:
(i) the most-favoured-nation applied rate of customs duty on the product in effect at the time the measure is imposed; or
(ii) the most-favoured-nation applied rate of customs duty on the product in effect on the day immediately preceding the date of entry into force of this Agreement.
3. The Parties share the understanding that neither tariff rate quotas nor quantitative restrictions would be a permissible form of bilateral safeguard measure.
ARTICLE 5.11
Conditions and Limitations
1. A Party shall not apply a bilateral safeguard measure:
(a) except to the extent, and for such time, as may be necessary to prevent or remedy the situations described in Articles 5.10 or 5.15;
(b) for a period exceeding two years; or
(c) beyond the expiration of the transition period.
The period referred to in subparagraph (b) may be extended by another year if the competent authorities of the importing Party determine, in conformity with the procedures specified in Section C, that the measure continues to be necessary to prevent or remedy the situations described in Articles 5.10 or 5.15 and to facilitate adjustment, provided that the total period of application of a safeguard measure, including the period of initial application and any extension thereof, does not exceed three years.
2. A Party shall only apply a bilateral safeguard measure to originating goods set out in Annex 2-A (Tariff Elimination Schedule), that are subject to preferential treatment under this Agreement.
3. In order to facilitate any adjustment in a situation where the expected duration of a bilateral safeguard measure exceeds one year, the Party that applies the measure shall, during the period of application, progressively liberalise the measure at regular intervals.
4. When a Party ceases to apply a bilateral safeguard measure, the rate of customs duty shall be the rate that would have been in effect for the product in accordance with Article 2.4 (Elimination or Reduction of Customs Duties).
ARTICLE 5.12
Provisional Measures
1. In critical circumstances where delay would cause damage that would be difficult to repair, a Party may apply a bilateral safeguard measure on a provisional basis, without complying with the requirements of Article 5.22.1, pursuant to a preliminary determination that there is clear evidence that imports of an originating good of the other Party have increased as a result of the reduction or elimination of a customs duty under this Agreement, and that such imports cause or threaten to cause the situations described in Articles 5.10 or 5.15.
2. The duration of any provisional measure shall not exceed 200 days, during which time the Party shall comply with the relevant procedural rules established in Sub-Section C.2. The Party shall promptly refund any tariff increases if the subsequent investigation described in Sub‑Section C.2 does not result in the imposition of a definitive measure in compliance with the requirements of Articles 5.10 or 5.15. The duration of any provisional measure shall be counted as part of the period referred to in Article 5.11.1(b). The importing Party shall inform the other Party upon imposing such provisional measures and it shall immediately refer the matter to the Joint Committee for examination if the other Party so requests.
ARTICLE 5.13
Compensation and Suspension of Concessions
1. A Party applying a bilateral safeguard measure shall consult with the other Party in order to mutually agree on appropriate trade-liberalising compensation in the form of concessions having substantially equivalent trade effects. The Party applying a bilateral safeguard measure shall provide an opportunity for such consultations no later than 30 days after the application of the bilateral safeguard measure.
2. If the consultations referred to in paragraph 1 do not result in an agreement on trade-liberalising compensation within 30 days after the start of the consultations, the Party affected by the bilateral safeguard measure may suspend the application of concessions which have trade effects substantially equivalent to the bilateral safeguard measure of the other Party no later than 90 days after the measure is applied.
3. The Party affected by the bilateral safeguard measure shall notify the other Party in writing at least 30 days prior to the suspension of concessions in accordance with paragraph 2.
4. The obligation to provide compensation pursuant to paragraph 1 and the right to suspend concessions pursuant to paragraph 2 expire on the date of termination of the bilateral safeguard measure.
ARTICLE 5.14
Use of Safeguard Measures and Time Lapse in Between Measures
1. A Party shall not apply a safeguard measure referred to in this Section to the import of a product that has previously been subject to such a measure, unless a period of time has elapsed that is equal to half of that during which the safeguard measure was applied for the immediately preceding period.
2. A Party shall not apply, with respect to the same product and during the same period:
(a) a bilateral safeguard measure or a provisional safeguard measure under this Agreement; and
(b) a safeguard measure pursuant to Article XIX of GATT 1994 and under the Safeguards Agreement.
ARTICLE 5.15
Outermost Regions
1. If any originating good of Mexico is being imported directly into the territory of one or several outermost regions of the European Union in such increased quantities and under such conditions as to cause or threaten to cause serious deterioration in the economic situation of the outermost region concerned, the European Union, after having examined alternative solutions, may exceptionally impose safeguard measures limited to the territory of the outermost region concerned.
2. Without prejudice to paragraph 1, all the provisions of Section C applicable to bilateral safeguard measures are also applicable to any safeguard measure adopted in relation to the outermost regions of the European Union.
3. A bilateral safeguard measure limited to the outermost regions of the European Union shall apply only to goods subject to preferential treatment under this Agreement.