Chapter Five

Customs Procedures

Subchapter A - Certification of Origin

Article 501: Certificate of Origin

1. Upon the date of entry into force of this Agreement, the

Parties shall establish a Certificate of Origin for the purpose

of certifying that a good being exported from the territory of a

Party into the territory of another Party qualifies as an

originating good, and may thereafter revise the Certificate by

agreement.

2. Each Party may provide that a Certificate of Origin for a

good imported into its territory be completed in a language

required under its laws or regulations.

3. Each Party shall provide that:

(a) an exporter in its territory shall complete and sign a

Certificate of Origin for any exportation of a good for

which an importer may claim preferential tariff

treatment upon importation of the good into the

territory of another Party; and

(b) where an exporter in its territory is not the producer

of the good, such exporter may complete and sign a

Certificate on the basis of

(i) its knowledge of whether the good qualifies as an

originating good,

(ii) reasonable reliance upon the producer's written

representation that the good qualifies as an

originating good, or

(iii) a completed and signed Certificate for the

good voluntarily provided to the exporter by

the producer.

4. Nothing in paragraph 3 shall be construed to require a

producer to provide a Certificate of Origin to an exporter.

5. Each Party shall:

(a) provide that a Certificate of Origin that has been

completed and signed by an exporter or a producer in

the territory of another Party that is applicable to

(i) a single importation of a good into its territory,

or

(ii) multiple importations of identical goods imported

into its territory within any specified period,

not exceeding 12 months, set out therein by the

exporter or producer,

shall be accepted by its customs administration for a

period of four years after the date on which the

Certificate was signed; and

(b) require an exporter or a producer in its territory that

completes and signs a Certificate pursuant to

subparagraph (a) to notify in writing all persons to

whom such Certificate was given of any change that

could affect its accuracy or validity.

Article 502: Obligations Regarding Importations

1. Except as otherwise provided in this Chapter, each Party,

with respect to an importer in its territory that claims

preferential tariff treatment for a good imported into its

territory from the territory of another Party, shall provide

that:

(a) the importer shall make a written declaration, based on

a valid Certificate of Origin, that the good qualifies

as an originating good;

(b) the importer shall have the Certificate in its

possession at the time such declaration is made;

(c) the importer shall provide, upon the request of that

Party's customs administration, a copy of the

Certificate;

(d) if the importer fails to comply with any requirement

set out in this Chapter, that Party may deny

preferential tariff treatment to the good;

(e) the importer, where the importer has reason to believe

that a Certificate on which a declaration was based

contains information that is not correct, shall

promptly make a corrected declaration and pay any

duties owing; and

(f) the importer, who voluntarily makes a corrected

declaration pursuant to subparagraph (e), shall not be

subject to penalties for the making of an incorrect

declaration.

2. Each Party shall provide that, where a good would have

qualified as an originating good when it was imported into the

territory of that Party but no claim for preferential tariff

treatment was made at that time, the importer of the good may,

within one year of the date on which the good was imported, apply

for a refund of any excess duties paid as the result of the good

not having been accorded preferential tariff treatment, upon

presentation of:

(a) a written declaration that the good qualifies as an

originating good at the time of importation;

(b) a copy of the Certificate of Origin to the same effect;

and

(c) such other documentation relating to the importation of

the good as that Party may require.

Article 503: Exceptions

Each Party shall provide that a Certificate of Origin shall

not be required for:

(a) a commercial importation of a good whose value does not

exceed the amount of (US)$1,000 or its equivalent

amount in the Party's currency or such higher amount as

it may establish, except that it may require that the

invoice accompanying such importation include a

statement certifying that such goods qualify as

originating goods;

(b) a non-commercial importation of a good whose value does

not exceed the amount of (US)$1000 or its equivalent

amount in the Party's currency, or such higher amount

as it may establish; or

(c) an importation of a good for which the Party into whose

territory the good is imported has waived the

requirement for a Certificate of Origin,

provided that such importation does not form part of a

series of importations that may reasonably be considered to

have been undertaken or arranged for the purpose of avoiding

the certification requirements set out in Articles 501 and

502.

Article 504: Obligations Regarding Exportations

Each Party shall provide that:

(a) upon the request of its customs administration, an

exporter in its territory, or a producer in its

territory that has provided a copy of a Certificate of

Origin to such exporter pursuant to Article

501(3)(b)(iii), shall provide a copy of the Certificate

to its customs administration;

(b) a false certification by an exporter or a producer in

its territory that a good to be exported to the

territory of another Party qualifies as an originating

good shall have the same legal consequences, with

appropriate modifications, as would apply to an

importer in its territory with respect to a

contravention of its customs laws and regulations

regarding the making of a false statement or

representation;

(c) where an exporter or a producer in its territory fails

to comply with any of the requirements set out in this

Chapter, it may apply such measures as the

circumstances may warrant;

(d) an exporter or a producer in its territory that has

completed and signed a Certificate of Origin, and that

has reason to believe that the Certificate contains

information that is not correct, shall promptly notify

in writing all persons to whom the Certificate was

given of any change that could affect the accuracy or

validity of the Certificate; and

(e) an exporter or a producer who voluntarily provides

written notification pursuant to subparagraph (d) shall

not be subject to penalties with respect to the making

of an incorrect certification.

Subchapter B - Administration and Enforcement

Article 505: Records

1. Each Party shall provide that:

(a) an exporter or a producer in its territory that

completes and signs a Certificate of Origin shall

maintain in its territory, for a period of five years

from the date the Certificate was signed or for such

longer period as such Party may specify, all records

relating to the origin of a good for which preferential

tariff treatment was claimed in the territory of

another Party, including records associated with

(i) the purchase of, cost of, value of, and payment

for, the good that is exported from its territory,

and

(ii) the purchase of, cost of, value of, and payment

for, all materials, including indirect materials,

used in the production of the good that is

exported from its territory, and

(iii) the production of the good in the form in

which the good is exported from its

territory; and

(b) an importer claiming preferential tariff treatment for

a good imported into the Party's territory shall

maintain in that territory, for a period of five years

from the date of importation of the good or for such

longer period as the Party may specify, a copy of the

Certificate and all other required documentation

relating to the importation of the good.

Article 506: Origin Verifications

1. For purposes of determining whether a good imported into its

territory from the territory of another Party qualifies as an

originating good, a Party may, through its customs

administration, conduct a verification solely by means of:

(a) written questionnaires to an exporter or a producer in

the territory of another Party;

(b) visits to the premises of an exporter or a producer in

the territory of another Party to review the records

and observe the facilities used in the production of

the good; or

(c) such other procedure as the Parties may agree.

2. Prior to conducting a verification visit pursuant to

paragraph (1)(b), a Party shall, through its customs

administration:

(a) deliver a written notification of its intention to

conduct such visit;

(i) to the exporter or producer whose premises are to

be visited,

(ii) to the customs administration of the Party in

whose territory the visit is to occur, and

(iii) to, if requested by the Party in whose

territory the visit is to occur, the embassy

of such Party in the territory of the Party

proposing to conduct the visit; and

(b) obtain the written consent of the exporter or producer

whose premises are to be visited.

3. The notification referred to in paragraph 2 shall include:

(a) the identity of the customs administration issuing the

notification;

(b) the name of the exporter or producer whose premises are

to be visited;

(c) the date and place of the proposed verification visit;

(d) the object and scope of the proposed verification

visit, including specific reference to the good subject

to the verification;

(e) the names and titles of the officials performing the

verification visit; and

(f) the legal authority for the verification visit.

4. Where an exporter or a producer has not given its written

consent to a proposed verification visit within 30 days of

receipt of notification pursuant to paragraph 2, the notifying

Party may deny preferential tariff treatment to the good that

would have been the subject of the visit.

5. Each Party shall provide that, where its customs

administration receives notification pursuant to paragraph 2, it

may, within 15 days from the date of receipt of such

notification, postpone the proposed verification visit for a

period not exceeding 60 days from the date of such receipt, or

for such longer period as the Parties may otherwise agree.

6. A Party shall not deny preferential tariff treatment to a

good based solely on the postponement of a verification visit

pursuant to paragraph 5.

7. Each Party shall permit an exporter or a producer whose good

is the subject of a verification visit by another Party to

designate two observers to be present during such visit, provided

that:

(a) the observers do not participate in a manner other than

as observers; and

(b) the failure of such exporter or producer to designate

observers shall not result in the postponement of the

visit.

8. Each Party shall, through its customs administration,

conduct a verification of a regional value-content requirement in

accordance with the Generally Accepted Accounting Principles

applied in the territory of the Party from which the good was

exported.

9. The Party conducting a verification shall provide the

exporter or producer whose good is subject to the verification

with a written determination of whether the good qualifies as an

originating good, including findings of fact and the legal basis

for the determination.

10. Where verifications by a Party indicate a pattern of conduct

by an exporter or a producer of false or unsupported

representations that a good imported into its territory qualifies

as an originating good, such Party may withhold preferential

tariff treatment to identical goods exported or produced by such

person until that person establishes compliance with the

provisions of Chapter Four (Rules of Origin).

11. Each Party shall provide that where it determines that a

certain good imported into its territory does not qualify as an

originating good based on a tariff classification or a customs

value applied by the Party to one or more materials used in the

production of the good, which differs from the tariff

classification or customs value applied to such materials by the

Party from whose territory the good was exported, the Party's

determination shall not become effective until it notifies in

writing both the importer of the good and the person that

completed and signed the Certificate of Origin for the good of

its determination.

12. A Party shall not apply a determination made under paragraph

11 to an importation made before the effective date of the

determination, provided that:

(a) the customs administration of the Party from whose

territory the good was exported has issued an advance

ruling on the tariff classification or on the customs

value of such materials, or has given consistent

treatment to the entry of such materials under the

tariff classification or customs value at issue, on

which a person is entitled to rely; and

(b) the advance ruling or consistent treatment was given

prior to notification of the determination.

13. Where a Party denies preferential tariff treatment to a good

pursuant to a determination made under paragraph 11, it shall

postpone the effective date of the denial for a period not

exceeding 90 days, provided that the importer of the good, or the

person who completed and signed the Certificate of Origin for the

good, demonstrates that it has relied in good faith to its

detriment on the tariff classification or customs value applied

to such materials by the customs administration of the Party from

whose territory the good was exported.

Article 507: Confidentiality

1. Each Party shall maintain, in accordance with its laws and

regulations, the confidentiality of confidential business

information collected pursuant to this Chapter and shall protect

that business information from disclosure that could prejudice

the competitive position of the persons providing the

information.

2. The confidential business information collected pursuant to

this Chapter may only be disclosed to those authorities

responsible for the administration and enforcement of

determinations of origin, and of customs and revenue matters.

Article 508: Penalties

1. Each Party shall maintain measures imposing criminal, civil

or administrative penalties for violations of its laws and

regulations relating to this Chapter.

2. Nothing in Articles 502(1)(d) and (f), 504(e) and 506(6)

shall be construed to prevent a Party from applying such measures

as the circumstances may warrant.

Subchapter C - Advance Rulings

Articles 509: Advance Rulings

1. Each Party shall, through its customs administration,

provide for the expeditious issuance of written advance rulings,

prior to the importation of a good into its territory, to an

importer in its territory or an exporter or a producer in the

territory of another Party, on the basis of the facts and

circumstances presented by such importer, exporter or producer of

the good, concerning:

(a) whether materials imported from the territory of a non-

Party undergo, as a result of production in the

territory of one or more of the Parties, the applicable

change in tariff classification under Chapter Four

(Rules of Origin) to qualify as an originating good;

(b) whether a good satisfies a regional value-content

requirement under either the transaction value method

or the net cost method set out in Chapter Four;

(c) the appropriate basis or method for customs value to be

applied by an exporter or a producer in the territory

of another Party, in accordance with the principles of

the Customs Valuation Code, in calculating the

transaction value of a good, or the value of materials

used in the production of a good, for which an advance

ruling is requested, for the purpose of determining

whether the good satisfies a regional value-content

requirement under Chapter Four;

(d) the appropriate basis or method for reasonably

allocating costs, in accordance with the allocation

methods set out in the Uniform Regulations, for

calculating the net cost of a good, or the value of an

intermediate material, for which an advance ruling is

requested, for the purposes of determining whether the

good satisfies a regional value-content requirement

under Chapter Four;

(e) whether a good that re-enters its territory after the

good has been exported from its territory to the

territory of another Party for repair or alteration

qualifies for duty-free treatment in accordance with

Article 307 (Goods Re-entered After Repair or

Alteration);

(f) whether the proposed or actual marking of a good

satisfies country of origin marking requirements under

Article 312 (Country of Origin Marking); or

(g) whether a good to be imported qualifies as a good of a

Party under Annexes 300-B or 302.2.

2. Each Party shall provide that an advance ruling issued

pursuant to paragraph 1 shall be based on:

(a) for the purpose of determining the origin of a good,

Chapter Four (Rules of Origin), the principles of the

Customs Valuation Code and the Uniform Regulations;

(b) for the purpose of determining country of origin

marking, Article 312 (Country of Origin Marking); and

(c) for the purpose of determining whether a good qualifies

as a good of a Party, Annex 302.2.

3. Each Party shall adopt or maintain procedures for the

issuance of advance rulings, including a detailed description of

the information reasonably required to process an application.

4. Each Party shall provide that its customs administration:

(a) may, at any time during the course of an evaluation of

an application for an advance ruling, request

supplemental information from the person requesting the

ruling;

(b) after it has obtained all necessary information from

the person requesting an advance ruling, shall issue

the ruling in accordance with the time periods

specified in the Uniform Regulations; and

(c) where the advance ruling is unfavorable to the person

requesting it, shall provide that person with a full

explanation of the reasons for the ruling.

5. Subject to paragraph 7, each Party shall apply an advance

ruling to importations into its territory of the good for which

the ruling was requested, commencing on the date of its issuance

or such later date as may be specified therein.

6. Each Party shall provide to any person requesting an advance

ruling the same treatment, including the same interpretation and

application of the provisions of Chapter Four (Rules of Origin)

regarding a determination of origin of a good, as it provided to

any other person to whom it issued an advance ruling, provided

that the facts and circumstances are identical in all material

respects.

7. The issuing Party may modify or revoke an advance ruling:

(a) if the ruling is based on an error

(i) of fact,

(ii) in the tariff classification of a good or the

materials subject to the ruling,

(iii) in the application of a regional value-

content requirement under Chapter Four (Rules

of Origin), or

(iv) in the application of the rules for determining

whether a good qualifies as a good of a Party

under Annexes 300-B or 302.2;

(b) if the ruling is not in accordance with an

interpretation agreed by the Parties regarding Chapter

Three (National Treatment and Market Access for Goods)

and Chapter Four (Rules of Origin);

(c) if there is a change in the material facts or

circumstances on which the ruling is based;

(d) to conform with an amendment of Chapter Three, Chapter

Four, Marking Rules or Uniform Regulations; or

(e) to conform with a judicial decision or a change in its

domestic law.

8. Each Party shall provide that any modification or revocation

of an advance ruling shall be effective on the date on which the

modification or revocation is issued, or on such later date as

may be specified therein, and shall not be applied to

importations of a good that have occurred prior to that date,

unless the person to whom the advance ruling was issued has not

acted in accordance with its terms and conditions.

9. Notwithstanding paragraph 8, the issuing Party shall

postpone the effective date of such modification or revocation

for a period not exceeding 90 days where the person to whom the

advance ruling was issued has in good faith relied to its

detriment on that ruling.

10. Each Party shall provide that where its customs

administration examines the regional value-content of a good for

which it has issued an advance ruling with respect to an approved

basis or method of customs value under Article 509(1)(c), or with

respect to an approved basis or method for reasonably allocating

costs under Article 509(1)(d), or with respect to whether a good

qualifies for duty-free treatment under Article 509(1)(e), it may

evaluate whether:

(a) the exporter or producer has complied with the terms

and conditions of the advance ruling;

(b) the exporter's or producer's operations are consistent

with the material facts and circumstances upon which

the advance ruling is based; and

(c) the supporting data and computations used in applying

the basis or method of customs valuation were correct

in all material respects.

11. Each Party shall provide that where its customs

administration determines that any requirement in paragraph 10

has not been satisfied, it may modify or revoke the advance

ruling as the circumstances may warrant.

12. Each Party shall provide that, where a person can

demonstrate that it used reasonable care and acted in good faith

in presenting the facts and circumstances on which an advance

ruling was based, and where the customs administration of a Party

determines that the ruling was based on incorrect information,

the person to whom such advance ruling was issued shall not be

subject to penalties.

13. Where a Party issues an advance ruling to a person that has

misrepresented or omitted material facts or circumstances upon

which the ruling is based or has failed to act in accordance with

the terms and conditions of such ruling, it may apply such

measures as the circumstances may warrant.

Subchapter D - Review And Appeal of Origin Determinations and

Advance Rulings

Article 510: Review and Appeal

1. Each Party shall grant substantially the same rights of

review and appeal of determinations of origins and advance

rulings by its customs administration as it provides to importers

in its territory to any person:

(a) who completes and signs a Certificate of Origin for a

good that has been subject to a determination of

origin;

(b) whose good has been subject to a country of origin

marking determination pursuant to Article 312 (Country

of Origin Marking); or

(c) who has received an advance ruling pursuant to Article

509(1).

2. Further to Articles 1804 (Administrative Proceedings) and

1805 (Review and Appeal), each Party shall provide that the

rights of review and appeal referred to in paragraph 1 shall

include access to:

(a) at least one level of administrative review,

independent of the official or office responsible for

the determination under review; and

(b) in accordance with its domestic law, judicial or quasi-

judicial review of the determination or decision taken

at the final level of administrative review.

Subchapter E - Uniform Regulations

Article 511: Uniform Regulations

1. Upon the date of entry into force of this Agreement, the

Parties shall establish, and implement through their respective

domestic laws or regulations, Uniform Regulations regarding the

interpretation, application and administration of the provisions

of Chapter Four (Rules of Origin).

2. Each Party shall implement any modification of or addition

to the Uniform Regulations no later than 180 days after the

Parties agree on such modification or addition, or such other

period as the Parties may agree.

Subchapter F - Cooperation

Article 512: Cooperation

1. Each Party shall notify the other Parties of the following

determinations, measures and rulings, including to the greatest

extent practicable those that are prospective in application:

(a) a determination of origin issued as the result of a

verification conducted pursuant to Article 506(1);

(b) a determination of origin that such Party is aware is

contrary to:

(i) a ruling issued by the customs administration of

another Party with respect to the tariff

classification or customs value of a good, or of

materials used in the production of a good, or the

reasonable allocation of costs where calculating

the net cost of a good, that is the subject of a

determination of origin, or

(ii) consistent treatment given by the customs

administration of another Party with respect to

the tariff classification or customs value of a

good, or of materials used in the production of a

good, or the reasonable allocation of costs where

calculating the net cost of a good, that is the

subject of a determination of origin;

(c) a measure establishing or significantly modifying an

administrative policy that is likely to affect future

determinations of origin, country of origin marking

requirements or determinations as to whether a good

qualifies as a good of a Party under the Marking Rules;

and

(d) an advance ruling, or a ruling modifying or revoking an

advance ruling pursuant to Article 509(1).

2. The Parties shall cooperate:

(a) in the enforcement of their respective customs-related

laws or regulations implementing this Agreement, and

under any customs mutual assistance agreements or other

customs-related agreements to which they are party;

(b) for purposes of the detection and prevention of

unlawful transshipments of textile and apparel goods of

a non-Party in the enforcement of prohibitions or

quantitative restrictions, including the verification

by a Party, in accordance with the procedures set out

in this Chapter, of the capacity for production of

goods by an exporter or a producer in the territory of

another Party, provided that the customs administration

of the Party proposing to conduct such verification,

prior to conducting the verification

(i) obtains the consent of the Party in whose

territory the verification is to occur, and

(ii) provides notification to the exporter or producer

whose premises are to be visited,

except that procedures for notifying the exporter or

producer whose premises are to be visited shall be in

accordance with other procedures as the Parties may

agree;

(c) to the extent practicable, for purposes of facilitating

the flow of trade between their territories, in

customs-related matters, such as the collection and

exchange of statistics regarding the importation and

exportation of goods, the harmonization of

documentation used in trade, the standardization of

data elements, the acceptance of an international data

syntax and the exchange of information; and

(d) to the extent practicable, in the storage and

transmission of customs-related documentation.

Article 513: Working Group and Customs Subgroup

1. The Parties hereby establish a Working Group on Rules of

Origin, comprising representatives of each Party, to ensure:

(a) the effective implementation and administration of

Articles 303, 308 and 312, Chapter Four (Rules of

Origin), this Chapter, the Marking Rules and the

Uniform Regulations; and

(b) the effective administration of the customs-related

aspects of Chapter Three (National Treatment and Market

Access).

2. The Working Group shall meet at least four times a year and

at the request of any Party.

3. The Working Group shall:

(a) monitor the implementation and administration by the

customs administrations of the Parties of Articles 303,

308 and 312, Chapter Four, this Chapter, the Marking

Rules and the Uniform Regulations to ensure their

uniform interpretation;

(b) endeavor to agree, upon the request of any Party, on

any proposed modification of or addition to Articles

303, 308 and 312, Chapter Four, this Chapter, the

Marking Rules and the Uniform Regulations;

(c) notify the Commission of any agreed modification of or

addition to the Uniform Regulations;

(d) propose to the Commission any modification of or

addition to Articles 303, 308 and 312, Chapter Three,

Chapter Four, this Chapter, the Marking Rules, the

Uniform Regulations or other provision of this

Agreement as required to conform with any change to the

Harmonized System; and

(e) consider any other matter referred to it by a Party, or

by the Customs Subgroup established under paragraph 6.

4. Each Party shall, to the greatest extent practicable, take

all necessary measures to implement any modification of or

addition to this Agreement within 180 days after the Commission

agrees on any such modification or addition.

5. If the Working Group fails to resolve a matter referred to

it pursuant to paragraph 2(f) within 30 days of such referral,

any Party may request a meeting of the Commission pursuant to

Article 2007.

6. The Working Group shall establish, and monitor the work of,

a Customs Subgroup comprising representatives of each Party. The

Subgroup shall meet at least four times a year and on the request

of any Party and shall:

(a) endeavor to agree on

(i) the uniform interpretation, application and

administration of the provisions of Articles 303,

308 and 312, Chapter Four, this Chapter, the

Marking Rules and the Uniform Regulations,

(ii) tariff classification and valuation matters

relating to determinations of origin,

(iii) equivalent procedures and criteria for the

request, approval, modification, revocation

and implementation of advance rulings,

(iv) revisions to the Certificate of Origin,

(v) any other matter referred to it by a Party, the

Working Group or the Committee on Trade in Goods

established under Chapter Three, and

(vi) any other customs-related matter arising under

this Agreement;

(b) consider

(i) the harmonization of customs-related automation

requirements and documentation, and

(ii) proposed customs-related administrative and

operational changes that could affect the flow of

trade between the Parties' territories;

(c) report periodically to the Working Group and notify it

of any agreement reached under this paragraph; and

(d) refer to the Working Group any matter on which it has

been unable to reach agreement within 60 days after the

matter was referred to it pursuant to subparagraph

(a)(v).

7. Nothing in this Chapter shall be construed to prevent a

Party from issuing a determination of origin or an advance ruling

related to a matter under consideration by the Customs Subgroup

or the Working Group or from taking such other action as it

considers necessary pending a resolution of the matter pursuant

to this Agreement.

Article 514: Definitions

For purposes of this Chapter:

advance ruling means a written interpretation issued by the

customs administration of a Party on the application of a measure

to a given set of facts and circumstances regarding a prospective

importation of a good into its territory;

commercial importation means the importation of a good into the

territory of any Party for the purpose of sale, or any

commercial, industrial, or other like use;

customs administration means the competent authority that is

responsible under the domestic law of a Party for the

administration of customs laws and regulations;

customs value means "customs value" as defined in Article 415;

determination of origin means a determination as to whether a

good qualifies as an originating good in accordance with Chapter

Four (Rules of Origin);

exporter in the territory of a Party includes an exporter located

in the territory of a Party or an exporter required under this

Chapter to maintain records in the territory of that Party

regarding exportations of a good;

identical goods means goods that are the same in all respects,

including physical characteristics, quality and reputation,

irrespective of minor differences in appearance that are not

relevant to the determination of origin of such goods under

Chapter Four (Rules of Origin);

importer in the territory of a Party includes an importer located

in the territory of a Party or an importer required under this

Chapter to maintain records in the territory of that Party

regarding importations of a good;

preferential tariff treatment means the duty rate applicable to

an originating good; and

producer includes a person that grows, mines, harvests,

manufactures, processes, or assembles a good, or any combination

thereof.