[CHAPTER] ON CUSTOMS PROCEDURES
 

SECTION A. GENERAL PRINCIPLES [AND OBLIGATIONS]

Each Party shall ensure that the preparation, adoption and application of their laws and regulations related to customs [procedures][matters] do not constitute unnecessary [procedural] obstacles to international trade.

2.1. Each Party shall make known in a prompt manner to the other Parties and to the general public through the Internet or other [broad] means of dissemination the laws, [regulatory][procedures] [provisions], [general] administrative [rulings], [and guidelines] in force, including their modifications, governing customs [matters][procedures] and in a manner that is accessible [given the legislation [and resources] of each Party].

2.2. Each Party shall promptly [and directly] communicate administrative decisions affecting individuals in a manner established in the legislation of each Party.

2.3. Each Party shall designate [or maintain], one or more points of contact to address and to respond to inquiries from interested persons pertaining to customs [matters][procedures], and shall publish on the Internet or by other [broad] means of dissemination information concerning steps for making inquiries.

[2.4. Each Party shall [inform][publish][notify] in advance any [general provision][regulation] pertaining to customs [matters][procedures] that it proposes to adopt, [and shall provide interested persons and interested Parties a reasonable opportunity to comment on such proposed regulations.][In exceptional circumstances, where a Party may need to adopt regulations on a provisional or interim basis without first providing an opportunity for comments from interested persons and Parties, a Party shall provide interested persons and Parties with a reasonable opportunity to comment before adopting the final regulations. Parties shall issue and [publish] written responses to the comments received from interested persons and Parties.]]

[2.5. Nothing in this article shall require a Party to make available on the Internet or other [broad] means of dissemination administrative rulings issued prior to the entry into force of this Agreement.]

2.6. Nothing in this Article shall require a Party to publish law enforcement procedures and internal operational guidelines related to [methods for inspecting goods,] conducting risk analysis and targeting, if the Party determines that such publication would interfere with law enforcement.

[Each Party should establish simplified customs procedures and [customs] legislation that facilitate and simplify the administration of the different customs regimes [based on the best practices agreed upon and generally recognized], [while fostering compliance with tax obligations], [monitoring of customs regimes] [and the protection of the interests of the States]. Their objective shall be to thus establish [harmonized][compatible] [customs] procedures, [of easily understood and readily applied], based on facilitation and simplification of these procedures [to reduce the administration and costs charged to the trading community].]

[4.1. Each Party through their Customs Administration shall establish [or maintain] efficient and effective customs procedures.]

[4.2. Each Party shall use appropriate inspection methods [and appropriate risk control techniques] that will enable monitoring to focus specially on high-risk goods.]

[4.3. Each Party [will increase the] [shall [introduce and][foster greater]] effectiveness and efficiency of their controls, by upgrading their infrastructure, training human resources, improving awareness among users, and making use of information technology and electronic media in their communications and establishing mechanisms of coordination between State institutions involved in foreign trade.]

[4.4. The Parties shall develop [and maintain] standard methodologies [and benchmarks] for periodically measuring and evaluating progress to fulfill these objectives.]

[5.1. Each Party [shall][should] encourage the use of automation in their customs procedures and controls taking into account the internationally accepted standards [in order to facilitate trade among the Parties].]

[5.2. Each Party [shall][should] [adopt][encourage the establishment of] compatible electronic data interchange systems between [authorized][users][agents] and its customs administrations that foster expedited [customs clearance] procedures.]

[5.3. Each Party [shall][should] [adopt][encourage the adoption of] a uniform core set of data elements required for the administration of national customs regulations and requirements associated with the customs clearance of goods.]

[5.4. Each Party [[shall][should] establish][shall encourage the establishment of] compatible electronic data interchange systems between customs administrations that foster increased cooperation and facilitate information exchange between the customs administrations.]

[5.5. In adopting and maintaining electronic data interchange systems, each Party [shall][should] [foster]:

[a) [make] electronic systems accessible to the [trading community][authorized][ users];]

[b) provide for electronic [submission][presentation] and processing of information and data prior to arrival of the goods to allow for release thereof upon arrival;]

[c) operate electronic/automated customs systems work [in conjunction with risk analysis and targeting];

[d) provide for the electronic exchange of information for the purposes of, inter alia: tariff classification, proof of value [, verification of origin] and prevention of illicit customs activities.]

[e) work toward developing of a set of common data elements for the customs clearance of goods and a compatible electronic systems among customs administrations.]]

6.1. The Parties recognize the need for effective and efficient administration of customs administration and undertake to collaborate and cooperate for their mutual benefit.

[6.2. The Parties shall foster greater mutual cooperation on issues relating to information exchange [, especially electronically] and data enhancement. Likewise, the Parties shall establish mechanisms and procedures to prevent, investigate and prosecute illicit customs related activities occuring in their territories.]

[6.3. Each Party shall inform the other Parties of any conduct or actions that could affect the legitimate interests of another Party, as per [a Memorandum of Understanding] [Customs Mutual Assistance Agreements].]

[6.4. The Parties shall establish mechanisms and procedures to provide for effective mutual cooperation, in order to provide Parties needing it with technical assistance with customs modernization, which involves to infrastructure, technological development, automation, communications, training, combating fraud and illicit customs activities.In pursuit of this objective, the Parties shall afford each other mutual assistance, through the exchange of their experience in, and knowledge of customs.]

[6.5. The Parties should develop parameters for the bilateral or plurilateral exchange of information related to compliance with customs regulations and requirements.]

[6.6. The Parties recognize the increasing use of automation and technology in customs operations and they note the varying degrees of development of this capabilities among them. They also recognize that some Parties will need technical and financial assistance to achieve such development. ]

[7.1. Each Party shall implement procedures for the recruitment, training and management of personnel to ensure a high standard of customs service to the trading community and shall ensure compliance with national standards of professional integrity.]

[7.2. Each Party shall adopt [and implement] [in their legislation], policies or regulations applicable [specifically] to [customs] officials [responsible for customs related matters][that include provisions on], codes of conduct and conflict of interest. [Likewise, [each Party] shall establish internal staffing control system that includes sanctions and disciplinary action.]]

[7.3. Persons authorized by customs administrations to use the computer systems or means of electronic data transmission shall comply with the security measures established by the customs authorities, including those related to the use of bar codes and confidential or security passwords. Violation of security measures and improper use of those systems shall be punished, pursuant to the national legislation of each Party.]

[Each Party [recognize the importance of][shall adopt [and maintain]] clear and effective provisions in their [customs][and][internal] legislation for [preventing][and][detecting], combating and sanctioning fraud and other illicit activities and will update it to keep pace with procedural and technological changes.]

[9.1. Each Party shall administer in a [uniform][consistent], impartial, and reasonable manner all its laws, regulations, and administrative decisions governing customs matters.]

[9.2. Each Party shall be a member of the World Customs Organization by the second year of entry into force of this Agreement.]

[Article 10. Advance Rulings]

[10.1. Each Party shall provide for the expeditious issuance of written advance rulings, prior to the importation of a good into its territory, whether at the request of an importer in its territory or by an exporter or producer in the territory of another Party. Advance rulings shall issued 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], including classification, [origin qualification][valuation,] country of origin [, or eligibility for preferential treatment under this Agreement].]

[10.2. Each Party shall adopt procedures for the issuance of advance rulings, 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 business confidential information].]

[10.3. Each Party shall [provide] that its respective 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) shall, after it has obtained all necessary information from the person requesting an advance ruling, issue the ruling [no more than][in][90] [120] days, [, extensions may be obtained, in qualified cases,] including a [full] explanation of the reasons upholding the ruling, upon request of the person who requested it.]

[10.4. 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 10.6 of this [Chapter].]

[10.5. Each Party shall provide to any other person [requesting an advance ruling] 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.]

[10.6. The issuing Party may modify or revoke an advance ruling upon a determination that:

a) the ruling was based on an error:

i) of fact or law, or

ii) in the classification, [value or] origin of the 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 is at variance with a judicial decision; or

d) the ruling is at variance with a modification to the applicable rules of origin under this Agreement.]

[Each Party shall provide that a modification or revocation of an advance ruling shall take effect no less than 60 days after it is [issued][published], [except with respect to any][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 if the person to whom the advance ruling was issued has relied in good faith [to his detriment] on that ruling.]

[10.7. Each Party may apply such measures as the circumstances may warrant when it issues an advance ruling to a person that has misrepresented or omitted material facts or circumstances on which the ruling is based or that has failed to act in accordance with the terms and conditions of the ruling.]

[11.1. 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.]

[11.2. Each Party shall grant to any person who has received an advance ruling the same rights of review and appeal of any advance ruling issued by its customs administration that it provides to importers in its territory.]

[12.1. Each Party shall maintain the confidentiality of business confidential 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 it has signed on confidentiality].]

[12.2. [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 business confidential information under this [Chapter][Agreement].][The information provided on a confidential basis by a Party shall be treated as such by the other Party.]]

[12.3. Nothing in this Article shall be construed to limit the collection and publication of aggregate import and export statistics.]

[12.4. Nothing in this Article shall preclude the Parties from sharing information between governments for law enforcement and customs administration purposes [as per an appropriate [Memorandum of Understanding][Customs Mutual Assistance Agreements] and [as provided for in the Party’s national legislation]].]

[Each Party shall maintain measures imposing civil or administrative penalties [and, where appropriate, criminal penalties], for violations of its customs laws, regulations and other customs rules governing classification, valuation, country of origin [, origin regime] and eligibility for preferential treatment, [in accordance with this Agreement, [and other national customs legislation and international treaties]].] [Customs administrations shall establish monitoring mechanisms that minimize the opportunity for the commission of unlawful acts.]

[14.1. 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][domestic] legislation.]

[14.2. Each Party shall adopt procedures allowing goods, to the extent possible, to be [released][cleared] within [48][24] hours of [arrival][presentation to customs].]

[14.3. Each Party shall adopt procedures allowing goods, to the extent possible, to be [released][cleared] at the point of arrival, without interim transfer to customs warehouses or other locations.]

[14.4. Each Party shall adopt procedures allowing for deferred payment of duties arising from the entry of goods.]

[14.5. Each Party shall adopt procedures allowing [importers][exporters] to withdraw goods from customs prior to the final computation or ascertainment of the duties accruing on entry of the goods [subject to acceptance of the applicable security].]

[14.6. Each Party may require [importers][exporters] to provide security as a condition for 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].]

[14.7. Each Party shall ensure that 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.] [No security shall be required for: (list to be established - e.g.: commercial samples, business traveler goods).]

[14.8. Each Party shall ensure that any security shall be [discharged][returned] as soon as possible after its customs administration is satisfied that the obligations under which the security was required have been fulfilled.]

[14.9. Each Party shall adopt procedures allowing:

a) importers to provide security in the form of bonds or other non-cash financial instruments;

b) importers that regularly enter goods to provide security in the form of continuous bonds or other non-cash financial instruments covering multiple entries; and

c) importers to provide security in any other forms specified by the customs administration.]

[14.10. The Parties shall 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 the customs authorities have received and reviewed all the necessary documentation and have assessed and collected the actual amount due and payable.]

[15.1. 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 Convention.]

[15.2. 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.]

[Each Party shall [employ] [design][foster the development of] [adopt] customs procedures and processing and clearance systems that include risk analysis and targeting methodologies for identifying high and low-risk goods, in order to focus customs enforcement activities on high-risk or [unknown risk] goods [and travelers] while facilitating clearance and movement of low-risk goods [and travelers]. [To this end,] customs authorities shall [[conduct][include] risk analysis [and targeting] [through processing] prior to the arrival of goods [and travelers][by processing advance] [of] information and data [when available] to identify those that will be subject to inspection and/or other customs procedures.]

[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.]

[18.1. The Parties shall include in their national legislation procedures allowing for the temporary [admission][importation] of goods, in order to facilitate international trade operations.]

[18.2. For the purpose of qualifying the temporary [admission][importation] of goods referred to in Article ___ of the [Chapter] on National Treatment and Market Access of this Agreement:

a) such entry shall be requested by a national or resident of another Party, except when this involves goods indicated in paragraph ___ (advertising films) of said Article; and

[b) the good should:

i) be used by the visitor, or under the visitor’s supervision, in the exercise of his activity, trade or profession, or for display or demonstration in the case of commercial samples and advertising films;

ii) not be sold or leased or [further manufactured or processed] while in the territory;

iii) be identifiable;

iv) be presented in quantities no larger than reasonable, given their intended use; and

v) leave the territory within the authorized time period.

[c) security shall be posted for the charges that would be owed in the case of final importation, which shall become reimbursable when the good leaves.] No security shall be required when the good is originating, or in the case of goods indicated in article…]]

[18.3. Each Party shall grant duty-free temporary [admission][importation] for the following articles, imported by, or for the use of, a resident of another Party:

a) professional equipment, including software and broadcasting and cinematographic equipment, necessary for carrying out the business activity, trade or profession of a business person that qualifies for temporary admission pursuant to the laws of the importing country; and

b) articles intended for display or demonstration, including commercial samples, product or service literature and advertising films.]

[18.4. No Party may condition the duty-free temporary [admission][importation] of a good referred to in the preceding Article, other than to require that such good:

a) be used solely [by or under] the professional supervision of a resident of another Party in the exercise of the business activity, trade or profession of that person, or for display or demonstration in the case of commercial samples, product or service literature and advertising films;

b) not be sold or leased while in its territory;

[c) be accompanied by a security in an amount no greater than [x% of ] the charges that would otherwise be owed on entry or final importation, releasable on exportation of the good. [No security shall be required in the case of goods indicated in paragraph ___ (advertising films) of Article ___, cited above];[No security shall be required when the good is originating, or in the case of goods indicated in Article XX…]]

[d) be identifiable at the time of its exportation;]

e) be exported on the departure of that person or within such other period of time as is reasonably related to the purpose of the temporary admission, initially up to one year from date of importation or such longer period as a Party may establish;

f) be imported in no greater quantity than is reasonable for its intended use; and

g) be otherwise admissible into the Party’s territory under its laws. ]

[18.5. When the requirements for temporary [admission][importation] are not met, the Parties [shall] [may] apply the corresponding tariffs and any other charges that would apply in the case of final importation of the good, and penalties pursuant to national legislation.]

[18.6. In the case of temporary [admission][importation] of containers and vehicles for the international transport of goods, the Parties shall authorize their exit by any rapid and economical route. Said containers or vehicles may exit through ports other than the port of entry without any charge, condition, or bond being imposed as a result thereof. The vehicle or carrier removing a container from the territory of a Party may be different from that used to bring it into the territory. For these purposes, a vehicle shall be understood to mean: a truck, tractor truck, tractor-trailer, or tractor-trailer unit, locomotive, railcar or other railroad equipment.]

[18.7. Each Party, through its customs administration, shall adopt procedures providing for the expeditious [release] [clearance] of the articles subject to temporary admission. To the extent possible, when such goods accompany a resident of another Party seeking temporary [entry][admission][importation] of them, and are imported by that person for use in the exercise of a business activity, trade or profession of that person [or for personal use as household effects for that person], the procedures shall allow for the articles to be [released] [cleared] simultaneously with the entry of that person.]

[18.8. Each Party shall, at the request of the person concerned and for reasons deemed valid by the national customs authorities, extend the time limit for temporary [admission][importation] beyond the point initially [fixed][fixed to a maximum established in the Party’s legislation or regulations on temporary importation].]

[18.9. Each Party shall permit temporarily [admitted][imported] goods to be exported through a customs port other than the one through which they were imported.]

[18.10. Each Party shall relieve the importer of liability for failure to export a temporarily [admitted][imported] good upon presentation of satisfactory proof to customs authorities that the good has been destroyed [under customs supervision] within the original time limit for temporary [admission][importation] or any lawful extension.]

[19.1. The Parties shall include in their national legislation procedures allowing for duty-free reimportation of goods provided that these goods were declared to the Customs Authorities upon exportation and returned in the same state or condition in which they were exported.]

[19.2. For purposes of qualifying the duty-free reimportation of goods the repairs or alterations shall not destroy the essential characteristics of the good or change it into a new or commercially different good. Operations to transform an unfinished good into a finished good shall not constitute repair or alteration, without prejudice to a part of the good undergoing repair of alteration.]

[20.1. The Parties shall promote inclusion in their national legislation of procedures that allow for the importation of commercial samples and printed advertising materials, in order to facilitate and streamline clearance processes, while maintaining, customs control activities.]

[20.2. [Each Party shall grant duty-free entry to commercial samples of negligible value and printed advertising materials imported from the territory of another Party, regardless of their origin, but may require that] [For purposes of qualifying for the duty-free importation of commercial samples, the following requirements shall be met]:

a) [such samples be imported solely for the solicitation of orders][shall only be for the purpose of gaining orders for goods or services from the other Party, regardless of whether the goods are originating or whether the services are being] provided from the territory of another Party or [from a] non-Party [country]; [or][and]

[b) [they may not be valued at more than xx, nor may they be marked, broken, perforated, or treated in any way other than for purposes of sale or use as samples] [such advertising materials be imported in no greater quantity than is reasonable for their intended use].]]

[20.3. For purposes of qualifying for the duty-free importation of printed advertising materials, the following requirements shall be met:

a) the materials shall correspond to those classified in Chapter 49 of the Harmonized System;

[b) the materials shall be imported in packages that do not contain more than one copy of each printed item;] and

c) the materials and packages may not be part of a larger shipment.]

[Each Party shall adopt [and maintain] procedures to facilitate and expedite clearance procedures for express shipments, while maintaining the appropriate customs control and customs selection activities.][Such procedures shall:

[a) be consistent and as common as possible between the Parties;]

b) provide for separate expedited customs processing for express shipments;

c) provide for pre-arrival processing of information and data related to express shipments;

d) permit submission of a single manifest covering all of the goods in the shipment by the express service company, through, if possible, electronic means;

e) where possible, and with the appropriate guarantees, provide for the release of certain goods through submission of minimal documentation [and deferred payment]; and

f) provide, in normal circumstances, for the release of express shipments within 6 hours of the submission of necessary customs documentation for release, provided the shipment [has been presented to customs][arrived at the customs facilities].]

[The Parties shall provide procedures for accelerated release of goods consigned to courier services and like entities.]

[22.1. Each Party shall adopt [and maintain] simplified, streamlined and expedited procedures for the importation of low value shipments, while maintaining the appropriate customs control and selection. Such procedures shall:

a) establish minimal documentation, data and procedural requirements;

[b) permit and encourage the electronic submission of information prior to arrival of the goods;] and

c) allow importation without the use of a customs broker.]

[22.2. The Parties shall provide that, to the extent possible and as appropriate, low-value [goods] be admitted free of duty.]

[23.1. The Parties will provide for the refund of duty and shall publish the circumstances in which such refund may be granted.]

[23.2. Each Party will maintain legislation and administrative methods which provide for procedures regarding:

a) the presentation by importers of declarations related to entry of goods along with the required supporting documentation; and

b) the expeditious assessment of those declarations by the customs authorities.]

[Confidential information: information that, if disclosed, would have an adverse effect on the person providing the information or for a third person that had received it from.]

[Business confidential information: information that is, by nature, confidential and which is not already published, generally available to third parties, or [otherwise] in the public domain. [Business confidential information includes information the disclosure of which would 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. 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.]]

[Preshipment inspection activities: all activities related 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.]

[Customs matters: 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 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: the set of rules that regulate customs activities, formalities and requirements applied or controlled by Customs Administrations.]

[Low value shipments: importations whose value does not exceed the amount of [(US)$1,000] or its equivalent amount in the country’s currency or such higher amount as a Party may establish, 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 meeting the minimum value requirement, and subject to the exceptions listed in Annex ___.]

 

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¹² One delegation requests including section B prior to Article 10.

¹³ One delegation requests moving Section B prior to Article 10.