FTAA - Free Trade Area of the Americas
Draft Agreement
Chapter on Market Access
(Continuation)
[ANNEX TO ARTICLE 1.4
NET COST
Section A – Definitions
For the purposes of this annex:
allocation base means any of the following allocation bases used by the producer for calculating the percentage of the cost relative to the good:
a) the sum of the cost of direct labor and the cost or value of the direct material of the good;
b) the sum of the cost of direct labor, the cost or value of the direct material and the direct costs and expenditures for producing the good;
c) the hours or costs of direct labor;
d) units produced;
e) machine hours;
f) values of sales
g) area of the plant; or
h) any other bases considered reasonable and quantifiable;
non-allowable costs means the costs of sales promotion, marketing and afterservices, royalties, loading and repacking, as well as non-allowable interest costs;
for the purposes of internal administration means any procedure of allocation used for tax declarations , financial statements or reports, internal control, financial planning, decision making, pricing, cost recovery, administration of cost control or performance measurement.
Section B – Calculation of net cost
1. The net cost shall be calculated in accordance with the following formula:
nc = tc - nac
where:
nc = net cost
tc = total cost
nac = non-allowable costs
2. For the purpose of determining total cost:
a) when the producer of a good, for calculating the total cost relative to the good, uses the cost and expenses allocation method for purposes of internal administration in order to distribute to the good the costs of direct materials, the costs of direct labor or the direct and indirect costs of production, or part of same, and this method reasonably reflects the costs of direct materials, the costs of direct labor or the direct and indirect costs and expenses of production incurred in the production of the good, this method shall be considered a reasonable method of allocation of costs and expenses, and may be used for allocating costs to the good;
b) the producer of the good may determine a reasonable amount for costs and expenditures not allocated to the good, as follows:
i) for the cost or value of direct materials and the costs of direct labor, based on any method that reasonably reflects the direct materials and direct labor used in the production of the good; and
ii) in regard to the direct and indirect costs and expenses of production, the producer of the good may choose one or more bases of allocation that reflect a relation between direct and indirect production costs and expenses and the good, in accordance with the provisions of subparagraphs e) and f);
c) the producer of the good may use any reasonable method for allocating costs and expenditures, that shall be used throughout its fiscal year or period;
d) the following are not included in the concept of total cost:
i) costs and expenditures of a service provided by the producer of a good to another person, when the service is not related to the good;
ii) costs and losses resulting from the sale of a part of the firm of the producer which is a discontinued operation;
iii) the costs related to the accumulated effect of changes in the application of accounting principles;
iv) the costs or losses resulting from the sale of a capital good of the producer;
v) the costs and expenditures related to accidental cases or acts of god;
vi) the earnings of the producer of the good regardless of whether they are retained by the producer or paid to other persons, such as dividends and taxes paid on these earnings, including {taxes or}capital gains {taxes};
e) in relation to each base selected, the producer may calculate a percentage of the cost for each good produced, according to the following formula:
ab
pc = ____________ x 100
tab
where
pc = percentage of the cost or expenditure relative to the good
ab = allocation base for the good
tab = total allocation base for all the goods produced by the producer of the good;
f) the costs or expenditures relative to which an allocation base is selected are assigned to the good in accordance with the following formula:
cag = ca x pc
where
cag = costs allocated to the good
ca = costs or expenditures to be allocated
pc = percentage of the cost or expenditure relative to the good
g) in determining net cost, when the costs or expenditures mentioned in subparagraph d) are included in the total cost allocated to the good, the percentage of the cost or expenditure used for allocating said cost or expenditure to the good shall be used for determining the value of excluded costs or expenditures that shall be subtracted from the total cost allocated;
h) any cost or expenditure allocated in accordance with a reasonable cost allocation method that is used for purposes of internal administration shall not be considered reasonably allocated when it can be demonstrated that sufficient evidence exists that its objective is to circumvent compliance with the provisions of this chapter.
3. For purposes of determining the costs of non-allowable interest, the producer of the good shall:
a) consider for the calculation of non-allowable interests only the loans assumed with a fixed or variable interest rate higher than the highest interest of the debt obligations issued by the central or federal government, plus 10 percentage points;
b) calculate the interest rate paid {in}{for} the period chosen by the producer in accordance with paragraph 4, through the application of the following formula:
iep
ir = _______________ x 100
alp
where:
ir = interest rate during the period
iep = interest paid during the period
alp = amount of loans paying interest during the period;
for the purposes of this subparagraph, the amount of the loans paying interest and the amount of interest paid shall be those that correspond to the loans in accordance with the provisions of subparagraph a); and if the interest paid does not correspond to the entire period chosen by the producer, only the proportional amount of the loan shall be considered for the period in which the interest was paid;
c) calculate with the following formula the non-allowable interest rate, based on the determination of the interest rate paid and established in subparagraph a):
nir = irp – (iro + 10)
where:
nir = non-allowable interest rate
irp = interest rate paid during the period
iro = interest rate of debt obligations issued by the central or federal government
d) calculate with the following formula the cost of non-allowable interest
nic = nir x alp
where:
nic = non-allowable interest costs
nir = non-allowable interest rate
alp = amount of loans paying interest during the period;
for the purposes of this subparagraph, the amount of loans earning interest during the period shall be determined in accordance with the provisions of subparagraph b).
4. For the purpose of calculating regional value content of the good based on the net cost method, the producer of the good may average the calculation relative to the good, and to other identical or similar goods, produced in a single plant by the producer;
a) in one month; or
b) during any period of the producer’s fiscal year greater than one month.
5. For the purposes of paragraph 4, the producer of the good shall consider all the units of the good produced during the chosen period. the producer may not vary the period, once it has been chosen.
6. When the producer of a good has calculated the regional value content of the good in accordance with the net cost method, based on estimated costs, including standard costs, budget {projects}{estimates} or other similar procedures, before or during the period selected in accordance with paragraph 4, the producer shall make the calculation on the basis of real costs incurred during the period relative to the production of the good.]
[CHAPTER ON] CUSTOMS PROCEDURES13
SECTION A. GENERAL PRINCIPLES [AND [OBLIGATIONS]]
Article 1. Transparency and dissemination
[1…X.1. The Parties shall ensure that the preparation, adoption and application of their laws and regulations related to customs procedures do not constitute unnecessary obstacles to international trade.]
1.1. The Parties shall make known [in a prompt and easily accessible manner] to the other Parties and to the general public the laws, {regulations,} [{regulatory} provisions], {regulations,} [[[guidelines,] procedures] and [general] administrative [notices, and] rulings], including their modifications, governing customs [matters][procedures] [rapidly and in a manner that is accessible given the legislation and resources of each Party] [within a reasonable period of time] [in a manner [determined] [allowed] by the national legislation] [[through their publication [and]] [[through][in] the Internet] [or other means of dissemination] [and ensure clarity and predictability of national requirements and procedures that affect international business operations and the timely clearance of goods]]
[1.2. Likewise, [specific] administrative decisions affecting [individuals][the interested party] shall be communicated to [those][the other] [Parties][individuals] [in a manner established in said legislation.] ]
[1.3. [Each Party][The Parties] shall designate, [establish,] and maintain one or more points of contact to address [or channel] inquiries from interested persons pertaining to customs [matters][procedures], and shall [publish or] [make available] on the Internet [or other means of dissemination] information concerning [procedures][steps] for making inquiries of such contact points.]
[1.4. Each Party shall [publish][notify] in advance [of] any {[regulations pertaining to] [legislative provisions on]} {[legislation][rule][regulation] pertaining to} customs matters [or changes to current customs procedures] that it proposes to adopt, and shall provide interested persons and [interested] Parties a reasonable opportunity to comment on such proposed regulations.]
[1.5. Nothing in this article shall require a Party:
to make available on the Internet administrative [notices or] rulings issued prior to the entry into force of this Agreement; [or]
[to publish law enforcement procedures and internal operational guidelines related to conducting risk analysis and targeting, if the Party determines that such publication would interfere with law enforcement].]
[1.6. [For purposes of this [Chapter]] “Customs matters” means matters pertaining to the classification and valuation of goods for customs purposes, to rates of duty, border taxes and all other import and export charges, to [country of origin][origin determination] and eligibility for preferential treatment under this Agreement, and to all other procedural and substantive requirements, restrictions and prohibitions on imports and exports, including such matters pertaining to goods imported or exported by or on behalf of travelers.][“Customs procedures” are the set of rules that regulate customs activities, formalities and regimes applied or controlled by Customs Administrations.]
Article 2. Facilitation and Simplification [of Customs Procedures]
[2.1. The Parties shall [continuously seek [and]] [to]establish [simplified] procedures [associated with the timely and efficient movement and clearance of goods and people] [for administering the different customs regimes] [based on customs regimes,] [to reduce the administration and cost burdens placed on the international trading community,] [based on the best practices agreed upon and generally recognized], while [fostering compliance with tax obligations [and monitoring of customs regimes] [and the protection of the interests of the States]] [maintaining appropriate enforcement and compliance capabilities]. Their objective shall be to thus establish harmonized [customs] procedures based on greater facilitation and simplification of these procedures.]
[The Parties will continually review, individually and as a group, the Customs legislation and practice in place in the Hemisphere to allow for the application of best practices and to provide for increasing application of easily understood and readily applied procedures, while providing at all times for the security of the revenue and protection of the interests of the States.]
[Article 3. Effectiveness and Efficiency]
[3.1. The Parties shall optimize procedures for clearance of goods [and travelers [luggage]] in order to [reduce costs [to agents and inconvenience to persons][and expedite clearance for goods and travelers]][facilitate international trade].]
[[3.1.] The [Parties shall seek to establish efficient] customs procedures [established by the customs administrations must be efficient], [considering proper] and effective [inspection methods]. [Use is to be made of selective and intelligent mechanisms that will enable monitoring to focus preferably on high-risk goods and travelers, facilitating speedy clearance of goods and rapid movement of travelers who pose less of a risk]]
[3.2. The Parties [undertake to increase the] [shall foster greater] effectiveness [and efficiency] of their controls, [while preserving the interests of the State and of free competition.][by upgrading their infrastructure, training human resources, improving awareness among users, and making use of information technology and electronic media in their communications. In addition, the Parties shall establish mechanisms of coordination between State institutions involved in foreign trade [and in inspecting government revenues in fulfillment of this objective.]]]
[3.3. In order to achieve the above objectives, the Parties shall promote the use [and compatibility] of electronic means in their communications with users [and other Parties,] give priority to the use of information {technology} [and risk management] in inspections and establish mechanisms for collaboration between State institutions participating in foreign trade [[,border activities] or [in] public revenue enforcement].]
[3.4 The Parties shall develop [standard]methodologies [(benchmarks)] for periodically measuring and evaluating progress to fulfill these objectives.]
[3.5. In order to achieve the above objectives, the Parties shall promote the use of electronic means in their communications with users, give priority to the use of information {technology} in inspections and establish mechanisms for collaboration between State institutions participating in foreign trade or in public revenue enforcement.]
[The Parties recognize the critical need for effective and efficient administration of the Customs function. To this end, the Parties are committed to collaboration and co- operation to their mutual benefit over and beyond the terms of existing international agreements.]
Article 4. Automation
[4.1. The Parties shall [encourage the] [endeavor to make] use of automation [in carrying out [and monitoring]][in their] customs [operations]. [For such purpose, the Parties shall consider internationally accepted standards][procedures and control]. ]
[4.2. [Each Party] [The Parties] shall [adopt][encourage the establishment of] compatible electronic data interchange systems between [traders][users] and its customs administrations that foster expedited clearance procedures.]
[4.3. [Each Party] [The Parties] [should][shall] [endeavor]adopt a [core set of data elements][common format [for data], in order to facilitate trade and facilitate] [required for the administration of national customs regulations and requirements associated with the] customs clearance [of goods] [; and work towards the adoption of a set of common data elements for customs clearance of goods between the Parties.] ]
[4.4. [Each Party] [The Parties] [[should] [shall] establish][shall {endeavor} {encourage} the establishment of] compatible electronic data interchange systems between customs administrations [that foster increased cooperation and [facilitate] information exchange.][between the customs administration and the trading community].]
[4.5. The Parties should develop parameters for the bilateral or plurilateral exchange of information related to compliance with customs regulations and requirements. ]
[4.6. In adopting and maintaining electronic data interchange systems, each Party shall [foster]:
[a) [make][users’ access to ] electronic systems [accessible [and available] to the trading community;]]
[b) [provide for] electronic [submission][presentation] and processing of information and data prior to arrival of the [shipment][goods] [to allow for [their] release [of goods] upon arrival];]
[c) [make customs][the operation of] electronic/automated [customs] systems [work] [in conjunction with risk analysis and targeting];]
[d) work toward developing compatible electronic systems among customs administrations; and]
[e) work towards developing a set of common data elements for customs clearance of goods.]]
[4.7. [Persons authorized][Users authorized by the customs administration] to use {[areas of]} the computer systems or means of electronic data transmission shall comply with the security measures established by {said regulations} {the customs authorities}, including those related to the use of bar codes and confidential or security passwords. Violation of the security measures and improper use of those systems shall be sanctioned pursuant to the [law established for such purpose.][national legislation of each Party] ]
[4.8. [In developing these technological capabilities,] the Parties [accept] recognize that the pace of [such development will vary][automation and technology development varies] among the Parties[, and recognize that some Parties will need technical and financial assistance to achieve it.] ]
[The Parties acknowledge the increasing effective utilisation of automation in the execution of the Customs function. At the same time, the Parties note the varying degrees of application of automation in the Parties.
The Parties are committed to the development of the technological capability of the Customs administrations of the Parties and accept that the pace of such development will vary among the States, and also that some Parties will need technical and financial assistance to this end.]
[Article 5. Cooperation]
[ 5….X.1.The Parties shall foster greater cooperation among the member administrations on issues relating to information exchange and data improvement. They shall also coordinate clearance procedures among non-customs border authorities.]
[5…X.2. The Parties shall provide a foundation for technical assistance and exchanges of best practices on all customs-related matters.]
[5.1. The Parties shall determine [the basis for technical assistance,] mechanisms and procedures to establish effective cooperation [and consultations] between them, aimed at preventing, [detecting and] investigating [and prosecuting][illicit] customs-related [illicit] activities [that occur in their [respective] territory.]]
[5.2. Each Party shall make known to the other Parties any conduct or actions that could affect the legitimate interests of another Party. [, as per an appropriate Memorandum of Understanding [or Customs Mutual Assistance Agreements].] ]
[5.3. The Parties shall provide mutual assistance, through the exchange of experiences and knowledge on the practices used in [the treatment for preventing or detecting] illegal and fraudulent operations.]
[5...X.3. The Parties shall establish mechanisms and procedures to provide for effective {communication} {cooperation} among them, in order to fulfill the requirements of technical and financial assistance in customs modernization processes as pertains infrastructure, technological development, automation, communications, training and efforts to combat fraud, to Parties that so need it.]
[The Parties recognize the critical need for effective and efficient administration of the Customs function. To this end, the Parties are committed to collaboration and co-operation to their mutual benefit over and beyond the terms of existing international agreements.]
Article 6. Integrity
[6…X.1. The competent authorities shall implement established procedures for the recruitment, management and training of personnel to ensure a high standard of service to the international customs community and establish a system of internal staff controls, including a regime of sanctions against employees proven to have compromised integrity standards. ]
[[6.1. The Parties shall ensure compliance with national standards on [honesty][integrity] in [discharging][fulfilling] responsibilities. Likewise, the Parties shall adopt] and [at the same time shall] implement codes of conduct consistent with relevant international commitments.]
[6.1 The Parties recognize the importance of integrity in the performance of customs administration and shall adopt and put into practice codes of conduct for customs officials [in accordance with international recommendations on the matter].]
[6.2. The Parties shall ensure that their codes of conduct, legislation, policies or regulations applicable specifically to customs officials include provisions on standards of conduct, conflict of interest, [and possible][including] sanctions and disciplinary action. ]
[6.3 Customs administrations shall implement established procedures for the recruitment, management and training of personnel to ensure a high standard of service to the international trading community and establish a system of internal staffing controls.]
[The Parties undertake to establish and maintain vigorous enforcement of codes of conduct of customs officials, which will include established international commitments in this area and incorporate appropriate sanctions in the case of breaches.]
[Article 7. Combating fraud and other illicit customs-related activities]
[7.1. [The Parties [recognize the importance of][shall adopt] clear and effective provisions in [their] customs legislation[s] [and corrective measures] [to][for preventing, combating and sanctioning] [detect, combat and punish] [deal with] fraud and other illicit activities [committed by customs [agents] or officials.] [The Parties shall enforce such legislation] and [will promote efforts to{]} update [it][them] in light of{]} procedural and technological changes.] [and review the appropriateness of the penalties provided] ]
[Article 8. Administration]
[8.1. Each Party shall administer in a [uniform][consistent], impartial and reasonable manner all its laws, regulations, [decisions [,determinations, notices] and rulings] governing customs matters.]
[8.2. Each Party shall ensure that its laws and regulations governing customs matters are not prepared, adopted or applied with a view to or with the effect of creating [[arbitrary or] unwarranted procedural] obstacles to international trade.]
[Article x. Membership to the World Customs Organization
x.1 Each Party shall be a member of the World Customs Organization by the second anniversary of entry into force of this Agreement.]
[B.
{OTHER} CUSTOMS PROCEDURES RELATED TO THE ENTRY OF
GOODS]14
[Article 9. Advance Rulings]
[9.1. Each Party shall 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 the application of its customs [laws [and regulations]] [legislation] [to an import transaction, including classification, valuation, country of origin[, or eligibility for preferential treatment under this Agreement].]
[9.2. Each Party shall adopt procedures for the issuance of advance rulings [and their confidentiality], including a detailed description of the information required to process an application for a ruling [and the procedures for claiming that information contained in that application is confidential business information]].]
[9.3. [Each Party] [The Parties] shall provide that [its] [their respective] customs administration:
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;
shall, after it has obtained all necessary information from the person requesting an advance ruling, issue the ruling within [120] days; [and] [including a full explanation of the reasons upholding the ruling]
shall, [upon request of the person who requested the advance ruling,] provide [to that][the] person [requesting an advance ruling] [a full][an] explanation of the reasons for the ruling.]
[9.4. Subject to paragraph 9.5, each Party shall apply an advance ruling to importations into its territory of the good for which the ruling was requested, beginning on the date of its issuance or such later date as may be specified in the ruling [, except where there is a request for immediate application of a modified ruling under Article 9.5 of this [Chapter].] [Each Party shall provide to any other person the same treatment as it provides to a person to whom it issued an advance ruling, provided that the facts and circumstances are identical in all material respects.]]
[9.5. The issuing Party may modify or revoke an advance ruling upon a determination that[:] [such a ruling was based on {an error of fact or law, or}]{[:]}
[(a) the ruling was based on an error;
(i) of fact or law, or
(ii) in the classification, value or origin of a good or material that is the subject of the ruling;
(b) there is a change in law, material fact, or circumstances on which the ruling is based;
(c) the ruling does not conform with a judicial decision; or
(d) the ruling does not conform with a modification to the applicable rules of origin in this Agreement]
[if there is a change in law, material fact, or circumstances on which the ruling is based.]
Each Party shall provide that a modification or revocation of an advance ruling shall be effective after a period of not less than 60 days from its [issuance or] publication, unless the person who received the ruling requests that it be applied upon its publication. [The issuing Party shall postpone the effective date of such modification or revocation for a period not less than 90 days where the person to whom the advance ruling was issued has relied in good faith [to its detriment] on that ruling.]]
[9.6 Each Party shall provide that where it issues an advance ruling to a person that has misrepresented or omitted material facts or circumstances on which the ruling is based or has failed to act in accordance with the terms and conditions of the ruling, the Party may apply such measures as the circumstances may warrant.]
[Article 10. Review and appeal]
[10…X.1. Each Party shall grant the same rights to review and appeal on any [determination or] advance ruling by its customs administration as it provides to importers in its territory to any person who has received an advance ruling or determination.]
[10.1. With respect to determinations relating to customs matters, each Party shall provide that importers in its territory have access to:
a) at least one level of administrative review independent of the official or office responsible for the decision under review; and
b) judicial [or quasi-judicial] review of the decision taken at the final level of administrative review.]
[Each Party will establish procedures for the review of decisions by the Customs authorities, including at least one level of administrative review.]
[Article 11. Confidentiality]
[11.1. Each Party shall maintain the confidentiality of [confidential] business information [[provided in connection with the administration of its customs laws, and shall not disclose such information] [without the specific permission of the person or government providing such information], except to the extent that it may be used or disclosed for law enforcement purposes or in the context of judicial proceedings][in accordance with its national legislation [and international agreements signed on the matter]].]
[11.2. [Each Party shall specify procedures by which persons or governments may claim that information provided in connection with administration of Customs laws is entitled to treatment as confidential business information under this Agreement.] [The information provided on a confidential basis by a Party shall be treated as such by the other Party.]]
[11.3. [For purposes of this [Chapter],] [“confidential information” means information whose disclosure would have an adverse effect on the person providing the information or on the third party it was received from.] [“confidential business information” means information that is by nature confidential and which is not already published, generally available to third parties, or [otherwise] in the public domain. [Confidential business information includes information the disclosure of which [would [be of] [provide a] significant competitive advantage to a competitor or would have a significantly adverse effect upon a person supplying the information or upon a person from whom that person acquired the information.][could prejudice the competitive position of the person providing the information.] Examples of such information may include [but is not limited to]:
the terms of sale or contracts relating to importations, including information with respect to transaction quantities and prices;
internal costs and prices, including manufacturing costs;
manufacturing processes; and
profit margins.]]]
[11.4. Nothing in this Article shall be construed to limit the collection and publication of aggregate import [and][or] export statistics.]
[11.5. Nothing in this Article shall preclude the Parties from sharing information between governments for law enforcement [, as per an appropriate Memorandum of Understanding or Customs Mutual Assistance Agreement[s] ] or customs administration purposes.]
[Article 12. Penalties]
[12.1. Each Party shall maintain measures imposing [civil or administrative penalties and, where appropriate, [criminal penalties], for violations of its customs laws and regulations [and other customs rules] [governing classification, valuation, country of origin, and eligibility for preferential treatment under this Agreement]]. [in accordance with its national legislation and relevant international treaties and conventions when an official or employee of the Customs Administration, in carrying out his or her responsibilities, violates domestic laws, to the detriment of individuals who are nationals or are [nationals] from any of the other Parties. Customs administrations shall establish monitoring mechanisms that minimize the opportunity for the commission of unlawful acts.]]
[12.2 The Parties shall provide for a review and appeal process as outlined in Article 10.1 for persons who have been assessed a customs-related infraction.]
[Article 13. [Release][Clearance] and security]
[13.1. Each Party shall adopt procedures providing for the [release][clearance] of goods within a period of time no greater than that required to ensure compliance with its [customs][[national] laws] [legislation].]
[13.2. Each Party shall adopt procedures allowing, to the extent possible, goods to be released within [48][24] hours of [arrival][presentation to customs].]
[13.3. Each Party shall [adopt][encourage the adoption of] procedures allowing, to the extent possible, goods to be [released][cleared] at the point of arrival, without interim transfer to customs warehouses or other locations.]
[13.4. Each Party shall adopt procedures allowing for deferred payment of duties accruing on entries of goods.]
[13.5. Each Party shall adopt procedures allowing [exporters][importers] to withdraw goods from customs prior to the final computation or ascertainment of the duties accruing on entry of the goods.][upon acceptance of the corresponding security.]
[13.6. Parties may require importers to provide security as a condition the release of goods, [when such security is required to ensure that obligations arising from the entry of the goods will be fulfilled][in accordance with the provisions of their national legislation ].]
[13.7. Each Party shall ensure that the amount of any security shall be no greater than that required to ensure that obligations arising from the entry of the {[}goods{][merchandise]} will be fulfilled {[in accordance with its domestic legislation]} [. The amount of the security required to ensure payment of duty and taxes shall not exceed the amount chargeable, based on tariff rates under domestic and international law, including this Agreement, and on valuation in accordance with the Agreement on Implementation of Article VII of GATT 1994, an annex to the Marrakesh Agreement Establishing the World Trade Organization.]{[in accordance with its domestic legislation]} ][No security shall be required for: (list to be established - e.g.: commercial samples, business traveller goods)]
[13.8. Each Party shall ensure that any security shall be [discharged [or] returned] as soon as possible after its customs administration is satisfied that the obligations under which the security was required have been fulfilled.]
[13.9. Each Party shall adopt procedures allowing:
importers to provide security in the form of bonds or other non-cash financial instruments;
importers that regularly enter goods to provide security in the form of continuous bonds or other non-cash financial instruments covering multiple entries; and
importers to provide security in any other forms specified by the Customs Administration.]
[13.10. The Parties will also provide mechanisms for the cancellation of such security and the [timely] refund to the importer of any amount found to be in excess of duty actually paid when all the necessary documentation is made available to and is checked by the Customs Authorities and the actual amount due and payable is assessed and secured.]
[Article 14. Harmonized System]
[14.1. Each Party shall ensure that its customs tariff and statistical nomenclatures are in conformance with the Harmonized System established pursuant to the International Convention on the Harmonized Commodity Description and Coding System, as provided in Article 3 of [the] [such] [Convention][Covenant].]
[14.2. The application by each Party of the Harmonized System does not impose obligations in relation to rates of customs duty. The tariff concessions and rules of origin under this Agreement are expressed in terms of the customs classifications and interpretations of tariff nomenclatures applicable to each Party at the time of the entry into force of this Agreement.]
[Article 15. Risk analysis/targeting methodology]
[15.1. Each Party shall [[foster the development of] [design] customs procedures and processing and clearance systems that include risk assessment and targeting methodologies for identifying high and low-risk goods.] [adopt and employ risk management systems as criteria for required verification activities, while respecting the confidentiality of information, in order to focus customs enforcement activities on high-risk goods [and travelers] while facilitating clearance and movement of low-risk goods [and travelers]. Such procedures [shall][may] include:
processing and release customs procedures and systems that include risk analysis and targeting to identify high-risk [travelers,] goods and shipments; and
[risk analysis through processing prior to the arrival of goods [and travelers] of information and data to identify or target high-risk goods [and travelers] and shipments that will be subject to inspection and/or other customs procedures].]]
[Article 16. Preshipment
inspection]
[16.1. No Party shall engage in {[}pre-shipment{]} inspection activities carried out on the territory of a Party, whether such activities are contracted or mandated by the government, or any government body, of a Party.]
[16.2. “Preshipment inspection activities” are all activities relating to the verification of classification, valuation, country of origin, and eligibility for preferential treatment under this Agreement of goods to be exported to the territory of a Party that contracts for or mandates the use of such activities.]
| Continuation:
[Section B. Other Customs Procedures
related to the Entry of Goods] |
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13
Square brackets [ ] indicate that different points of view do exist on the text included between them. Wiggly brackets { } indicate that differences in translation may exist on texts included between them.
14
One delegation requests including section B prior to article 9.
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