FREE TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE¡¯S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE REPUBLIC OF CHILE
Chapter IV
Rules of Origin
Article 15 Originating Goods
For the purpose of this Agreement, a good shall be regarded as originating in China or in Chile when:
(a) the good is wholly obtained or produced entirely in the territory of one Party, within the meaning of Article 16;
(b) the good is produced entirely in the territory of one or both Parties, exclusively from materials whose origin conforms to the provisions of this Chapter; or
(c) the good is produced in the territory of one or both Parties, using non-originating materials that conform to a regional value content not less than 40%, except for the goods listed in the Annex 3, which must comply with the requirements specified therein.All goods must meet the other applicable requirements of this Chapter.
Article 16 Wholly Obtained Goods
For the purpose of subparagraph (a) of Article 15, the following goods shall be regarded as wholly obtained or produced in the territory of one Party:
(a) mineral products extracted from the soil or from the seabed of China or Chile;
(b) plants and plants products harvested in China or Chile;
(c) live animals, born and raised in China or Chile;
(d) products from live animals raised in China or Chile;
(e) products obtained by hunting, trapping or fishing in inland waters conducted in China or Chile;
(f) products of sea fishing and other products taken from the territorial sea or the exclusive economic zone of China or Chile;
(g) products of sea fishing and other products taken from the sea beyond the exclusive economic zone by a vessel flying the flag of China or Chile;
(h) products manufactured on board a factory ship flying the flag of China or Chile, exclusively from products referred to in subparagraphs (f) and (g);
(i) used articles collected in China or Chile fit only for the recovery of raw materials;
(j) waste and scrap resulting from manufacturing operations conducted in China or Chile and are fit only for the recovery of raw materials;
(k) products extracted from the seabed or beneath the seabed outside the territorial sea of China or Chile, provided that they have sole rights to exploit such seabed; and
(l) products manufactured in China or Chile exclusively from products specified in subparagraphs (a) to (k).
Article 17 Regional Value Content (RVC)
1. The regional value content of a good shall be calculated on the basis of the following method:
V ¨C VNM
RVC= ----------------- x 100
V
where:
RVC means the regional value content expressed as a percentage;
V means the value of the good, as defined in the Customs Valuation Agreement, adjusted on an FOB basis; and
VNM means thevalue,as defined in the Customs Valuation Agreement, of the non-originating materials, adjusted on a CIF basis, except as provided in paragraph 4.
2. The percentage of regional value content shall not be less than 40%, except for the goods listed in Annex 3, which shall comply with the Product Specific Rules as provided under Article 18.
3. The value of the non-originating materials used by the producer in the production of a good shall not include, for purposes of calculating the regional value content of the good, pursuant to paragraph 1, the value of non-originating materials used to produce originating materials that are subsequently used in the production of the good.
4. When the producer of the good acquires a non-originating material within the Party¡¯s territory where it is located, the value of such material shall not include freight, insurance, packing costs, and any other costs incurred in transporting the material from the supplier¡¯s warehouse to the producer¡¯s location.
Article 18 Product Specific Rules
For the purpose of determining the origin of the goods, the goods listed in Annex 3 shall comply with the correspondingorigin criteria specified therein.
Article 19 Operations that Do Not Confer Origin
1. The following operations shall be considered as insufficient working or processing to confer the status of originating products:
(a) preserving operations to ensure that the products remain in good condition during transport and storage;
(b) breaking-up and assembly of packages;
(c) washing, cleaning, removal of dust, oxide, oil, paint or other coverings;
(d) ironing or pressing of textiles;
(e) simple painting and polishing operations;
(f) husking, partial or total bleaching, polishing, and glazing of cereals and rice;
(g) operations to color sugar or form sugar lumps;
(h) peeling, stoning and shelling, of fruits, nuts and vegetables;
(i) sharpening, simple grinding or simple cutting;
(j) sifting, screening, sorting, classifying, grading, matching; (including the making-up of sets of articles);
(k) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;
(l) affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging;
(m) simple mixing of products, whether or not of different kinds;
(n) simple assembly of parts of articles to constitute a complete article or disassembly of products into parts;
(o) operations whose sole purpose is to ease port handling;
(p) a combination of two or more operations specified in subparagraphs (a) to (o); and
(q) slaughter of animals.
2. For purposes of this Article:
(a) simple, generally describes activities which need neither special skills nor special machines, apparatus or equipment specially produced or installed for carrying out the activity; and
(b) simple mixing, generally describes activities which need neither special skills nor machines, apparatus or equipment especially produced or installed for carrying out the activity. However, simple mixing does not include chemical reaction.
Article 20 Accumulation
Where originating goods or materials of a Party are incorporated into a good in the other Party¡¯s territory, the goods or materials so incorporated shall be regarded to be originating in the latter¡¯s territory.
Article 21 De Minimis.
A good that does not conform to the tariff classification change, pursuant to the provisions of Annex 3, shall be considered to be originating even if the value of all non-originating materials used in its production not meeting the tariff classification change requirement does not exceed 8% of the value of the given good, determined pursuant to Article 17.
Article 22 Sets
Sets, as defined in General Rule 3 of the Harmonized System, shall be regarded as originating when all the components of thesets are originating. Nevertheless, when a set is composed of originating and non-originating products, the set as a whole shall be regarded as originating, provided that the value of the non-originating products does not exceed 15%of the total value of the set, determined pursuant to Article 17.
Article 23 Accessories, Spare Parts, and Tools
Accessories, spare parts, or tools presentedas part of the good upon importation shall be disregarded when determining the origin of the good, provided that:
(a) the accessories, spare parts, or tools are classified with and not invoiced separately from the good; and
(b) the quantities and the value of said accessories, spare parts, or tools are the normal ones for the good.
Article 24 Packaging Materials and Containers for Retail Sale
If the goods are subject to a change in tariff classification criteria set out in Annex 3, the origin of the packaging materials and containers in which goods are packaged for retail sale shall be disregarded in determining the origin of the goods, provided that the packaging materials and containers are classified with the goods. However, if the goods are subject to a regional value content requirement, the value of the packaging materials and containers used for retail sale shall be taken into account when determining the origin of the goods.
Article 25 Packing Materials and Containers for Shipment
The packing materials and containers used to protect a good during its transportation, shall not be taken into account when determining the origin of the good.
Article 26 Neutral Elements
1. In order to determine whether a product originates, the origin of the neutral elements defined in paragraph 2 shall not be taken into account.
2. Neutral element mean articles used in the production of a good which are,not physically incorporated into it, neitherform part of it, including:
(a) fuel, energy, catalysts and solvents;
(b) equipment, devices, and supplies used for testing or inspecting the goods;
(c) gloves, glasses, footwear, clothing, safety equipment and supplies;
(d) tools, dies and molds;
(e) spare parts and materials used in the maintenance of equipment and buildings;
(f) lubricants, greases, compounding materials and other materials used in production or used to operate equipment and buildings; and
(g) any other goods that are not incorporated into the good but whose use in the production of the good can reasonably be demonstrated to be a part of that production.
Article 27 Direct Transport
1. Preferential tariff treatment provided for in this Agreement shall be applied to goods which satisfy the requirements of this Chapter and are directly transported between the Parties.
2. Notwithstanding paragraph 1, where the transit of goods takes place through non-Parties for storage, with or without transshipment, a maximum length of time not exceeding three months shall be imposed on the duration of stay of the goods since its entry into non-Parties.
3. To be eligible for preferential tariff treatment, goods shall not undergo any processing or production process in a non-Party except for loading, unloading, reloading, packing, packaging, repackaging or any other operation necessary for preservation in good condition or transportation.
4. Compliance with the provisions set out in paragraph 2 and 3 shall be authenticated by presenting to the customs authorities of the importing Party either with customs documents of the non-Parties or with any other documents so provided to the satisfaction of the customs authorities of the importing Party.
Article 28 Exhibitions
1. Preferential tariff treatment as provided for under this Agreement shall be granted to originating products, sent for exhibition in a non-Party and sold after the exhibition for importation in China or Chile when the following conditions are met to the satisfaction of the customs authorities of the importing Party:
(a) an exporter has consigned these products from China or Chile to the non-Party where theexhibition has actually taken place;
(b) the products have been sold or otherwise disposed of by that exporter to a person in China or Chile;
(c) the products have been consigned during the exhibition or immediately thereafter in the state in which they were sent for exhibition;
(d) the products have not been used for any purpose other than demonstration at the exhibition since they were consigned for exhibition; and
(e) the products have remained during the exhibition under customs authorities control.
2. For the purpose of application of paragraph 1, a certificate of origin shall be issued in accordance with the provisions of Chapter V and submitted to the customs authorities of the importing Party, with the name and address of the exhibition being attached thereon. Where necessary, additional documentary evidence related to the exhibition may be required.
3. Paragraph 1 shall apply to any trade, industrial, agricultural or crafts exhibition, fair or similar public show or display which is not organized for private purposes in shops or business premises with a view to the sale of foreign products.
Article 29 Definitions
For the purposes of this Chapter:
CIF means the value of the good imported, inclusive of the cost of freight and insurance up to the port or place of entry into the country of importation;
Customs Valuation Agreement means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement;
FOB means the value of the good free on board, independent of the means of transportation, at the port or site of final shipment abroad;
material means a good that is used in the production or transformation of another good, including a part or an ingredient;
production means growing, raising, mining, harvesting, fishing, trapping, hunting, manufacturing, processing, or assembling a good; and
producer means a person who grows, raises, mines, harvests, fishes, hunts, manufactures, processes or assembles a good.
Chapter V
Procedures Related to Rules of Origin
Article 30 Certificate of Origin
1. To qualify originating goods for preferential tariff treatment, Certificate of Origin as set out in Annex 4 shall be submitted on importation.
2. A Certificate of Origin shall be issued by the competent governmental authorities, for China by the General Administration of Quality Supervision, Inspection and Quarantine, and for Chile as defined in the Annex 5, on the written application presented by the exporter. The Certificate of Origin must be completed in English and duly signed, coveringone or more goods under one consignment. The original Certificate of Origin must be submitted to the customs authorities of the importing Party.
3. The exporter applying for a Certificate of Origin shall provide all necessary documents to prove the originating status of the products concerned as required by the competent governmental authorities, and undertake to fulfill the other requirements as laid down under this Chapter.
4. The issuing competent governmental authorities shall have the rights, by taking any appropriate measures prior to the exportation, to examine the originating status of the products and the fulfillment of the other requirements of this Chapter. For this purpose, they shall have the rights to request any supportive evidence and to carry out any inspection of the exporter's accounts or any other check considered appropriate.
5. A Certificate of Origin as referred to in paragraph 1 shall be valid for one yearfrom the date of issue in the exporting Party.The original Certificate of Origin must be submitted within the said periodto the customs authorities of the importing Party. In the case of China, the original Certificate of Origin without the stamp of ¡°ORIGINAL¡± shall be presented to the customs authorities of Chile. In the case of Chile, there shall be only one copy of the Certificate of Origin bearing the stamp of ¡°ORIGINAL¡± to be presented to the customs authorities of China.
6. The Parties shall implement a Certification and Verification Networking System on the Certificate of Origin (CVNSCO) in two years after the signature of this Agreement as laid down under the Annex 6.
Article 31 Refund of Import Customs Duties or Deposit
Each Party shall provide that, where a good would had been qualified as an originating good when it was imported into the territory of that Party but without Certificate of Origin under this Agreement at that time, the importing customs authorities may impose general import customs duty or deposit on that good, where applicable. In this case, the importer may apply for a refund of any excess import customs duties paid or deposit imposed, where applicable, as the result of the good not having been accorded with preferential tariff treatment, within one year for the duty paid or three months for the deposit imposed, where applicable, after the date on which the good was imported, on presentation of:
(a) a written declaration at the time of importation that the good presented is qualified as an originating good;
(b) the original Certificate of Origin which was issuedprior to or within 30 days after the exportation; and
(c) other documentation relating to the importation of the good as the customs authorities of the importing Party may require.
Article 32 Exceptions from Certificate of Origin
1. 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 US$ 600 or its equivalent amount in the Party's currency, except that it may require that the invoice accompanying the importation include a statement certifying that the good is qualified as an originating good;
1)
(b) a non-commercial importation of a good whose value does not exceed US$ 600 or its equivalent amount in the Party's currency; or
2) (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. If a Party decides to apply this provision it shall notify the exporting Party.
2. Exceptions established in subparagraphs (a), (b), and (c), shall be applicable provided that the importation does not form part of one or more importations that may reasonably be considered to have been undertaken or arranged for the purpose of avoiding the certification requirements of Article 30.
Article 33 Supporting Documents
The documents referred to in paragraph 3 of Article 30 used for the purpose of proving that products covered by a Certificate of Origin can be considered as products originating and fulfill the other requirements of this Chapter may include but not limited to the following:
3) (a) direct evidence of the processes carried out by the exporter or supplier to obtain the goods concerned, contained for example in his accounts or internal book-keeping;
(b) documents proving the originating status of materials used, where these documents are used in accordance with the domestic legislation;
4)
(c) documents proving the working or processing of materials, where these documents are used in accordance with the domestic legislation; or
(d) certificates of origin proving the originating status of materials used.
Article 34 Obligations Regarding Importations
1. Each Party¡¯s customs authorities shall require that an importer claiming preferential tariff treatment for a good to:
5) (a) make a written declaration, in the importation document established in its legislation, based on a valid Certificate of Origin, that the good is qualified as an originating good;
(b) have a Certificate of Origin in its possession at the time the import declaration referred to in subparagraph (a);
(c) provide, upon request of the customs authorities, the original Certificate of Origin; and
6) (d) promptly make a corrected declaration and pay any duties owed, where the importer has reason to believe that a Certificate of Origin on which a declaration was based contains information that is not correct.
2. Each Party shall provide that, when an importer in its territory does not comply with any requirement established in Chapter III, Chapter IV and this Chapter, the claimed preferential tariff treatment shall be denied for the imported goods from the territory of the other Party.
Article 35 Invoicing by a Non-Party Operator
When a good to be traded is invoiced by a non-Party operator, the exporter of the originating Party shall indicate, in the field title ¡°Remarks¡± of the respective Certificate of Origin, the following data of the producer in the originating Party: name, address and country. The consignee written in the Certificate of Origin must be from China or Chile.
Article 36 Preservation of Certificate of Origin and Supporting Documents
1. The exporter applying for the issue of a Certificate of Origin shall keep for at least three years the documents referred to in paragraph 3 of Article 30 and Article 34.
2. The competent governmental authorities of the exporting Party issuing a Certificate of Origin shall keep a copy of the Certificate of Originfor at least three years.
Article 37 Cooperation and Mutual Assistance
1. The competent governmental authority of the exporting Party shall provide to the customs authorities of the importing Party with specimen impression of stamps used for the issuing of Certificate of Origin, and the specimen of the stamp of ¡°ORIGINAL¡± from Chile, and with the address of the competent governmental authorities.
2. In order to ensure the proper application of this Chapter, the Parties shall assist each other, in checking the authenticity of Certificate of Origin and the correctness of the information given in this certificate and supporting documents as established in paragraph 3 of Article 30 and may use electronic means in this process.
3. The customs authorities of the Parties shall negotiate a Mutual Administrative Assistance Agreement that will cover relevant customs issues.
Article 38 Verification of Origin
1. Verification of origin shall be carried out whenever the customs authorities of the importing Party have doubts as to the authenticity of Certificate of Origin, the originating status of the products concerned or the fulfillment of the other requirements of this Chapter.
2. For the purposes of implementing the provisions of paragraph 1, the customs authorities of the importing Party shall return a photo-copy of Certificate of Origin, to the competent governmental authorities of the exporting Party, indicating the reasons for the enquiry. Any documents and information obtained establishing that the information given on the Certificate of Origin is incorrect shall be forwarded in support of the request for verification.
3. The verification shall be carried out by the competent governmental authorities of the exporting Party. For this purpose, they shall have the rights to call for any evidence and to carry out any inspection of the exporter's accounts or any other check considered appropriate.
4. The customs authorities requesting the verification shall be informed of the results of this verification as soon as possible. These results must indicate clearly whether the documents are authentic, whether the products concerned can be considered as products originating and fulfill the other requirements of this Chapter, including the findings of facts and the legal basis for the determination.
5. If no reply within six months of the date of the verification request was received or if the reply does not contain sufficient information to determine the authenticity of the document in question or the real origin of the products, the requesting customs authorities shall deny preferential tariff treatment.
6. Where the customs authorities of the importing Party determines that it has been certified more than once falsely or without substantiation that a good qualifies as originating, the customs authorities of the importing Party may suspend preferential tariff treatment to identical goods imported by the same importer, until it demonstrates that it has complied with the provisions under this Agreement.
7. All the information requested, supporting documents, and all other related information exchange between the customs authorities of the importing Party and the competent governmental authorities regarding this Article may be communicated electronically.
Article 39 Penalties
Penalties shall be imposed in accordance with domestic legislation of each Party for infringement onthe provisions of this Chapter.
Article 40 Confidentiality
1. The Parties shall maintain the confidentiality of confidential business information acquired pursuant to this Chapter. Any violation of the confidentiality shall be treated in accordance with the domestic legislation of each Party.
2. This information may only be disclosed to those customs and revenue authorities, or in the context of judicial proceedings.
Article 41 Advance Rulings
1. Customs authorities of each Party, shall issue written advance rulings prior to the importation of a good into its territory upon written request of an importer in its territory, or an exporter in the territory of the other Party, on the basis of the facts and circumstances provided by the requester, including a detailed description of the information required to process a request for an advance ruling, concerning:
(a) tariff classification; or
(b) whether a good qualifies as an originating good under the provision established in this Agreement.
2. The customs authorities shall issue advance rulings after receiving a written request, provided that the requester has submitted all necessary information. The issuance of advance ruling on determination of origin of a good shall be made within 150 days.
3. Each Party shall provide that advance rulings shall be in force from their date of issuance, or such other date specified by the ruling, for at least one year, provided that the facts or circumstances on which the ruling is based remain unchanged.
4. The customs authorities issuing the advance ruling may modify or revoke an advance ruling where facts or circumstances provethat the information on which the advance ruling is based is false or inaccurate.
5. Where an importer claims that the treatment accorded to an imported good should be governed by an advance ruling, the customs authorities may evaluate whether the facts and circumstances of the importation are consistent with the facts and circumstances upon which the advance ruling was based.
6. Each Party shall make its advance rulings publicly available, subject to confidentiality requirements in its domestic law, for purposes of promoting the consistent application of advance rulings to other goods.
7. If a requester provides false information or omits relevant circumstances or facts in its request for an advance ruling, or does not act in accordance with the ruling¡¯s terms and conditions, the importing Party may apply appropriate measures, including civil, criminal, and administrative actions,penalties, or other sanctions in accordance with its domestic laws.
Article 42 Other Customs Issues Related to Rules of Origin
Each Party:
(a) subject to its domestic law, shall publish its customs laws, regulations, and customs procedures of general application which are related to Rules of Origin, on the websites and designate one or more inquiry points to address inquiries from interested persons concerning origin matters, consulting by Internet or other means;
(b) shall exchange the statistics regarding the imports under this Agreement from the other Party as early as possible, and at least before the end of February; and
(c) shall designate focal points between the two customs authorities to ensure the effective and efficient implementation of Rules of Origin under this Agreement.
Article 43 Transitional Provision for Goods in Transit or Storage
The provisions of this Agreement may be applied to goods which comply with the provisions of this Chapter and which on the date of entry into force of this Agreement are either in transit from China or Chile, or in temporary storage in customs warehouses or in free zones. The importer shall submit to the customs authorities of the importing Party, within four months of the said date, a Certificate of Origin, and shall be prepared to submitall documents supporting that good is originating. In this case, the competent governmental authorities may issue retroactively Certificates of Origin within this transitional period.
Annex 3
Product Specific Rules
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Change of Chapter |
Change of Heading |
50% RVC |
50% RVC |
50% RVC |
50% RVC |
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Chapter 1 |
Chapter 17 |
Chapter 20 |
30.02 |
40.06 |
69.07 |
85.09 |
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Chapter 2 |
Chapter 18 |
Chapter 21 |
30.03 |
40.07 |
69.08 |
85.16 |
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Chapter 3 |
Chapter 19 |
Chapter 23 |
30.04 |
40.08 |
69.09 |
85.44 |
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Chapter 4 |
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Chapter 24 |
30.05 |
4009.11 |
69.10 |
87.02 |
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Chapter 5 |
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Chapter 25 |
30.06 |
4009.12 |
69.11 |
87.04 |
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Chapter 6 |
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Chapter 26 |
31.02 |
4009.22 |
69.12 |
87.07 |
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Chapter 7 |
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28.01 |
31.03 |
4010.11 |
69.13 |
87.08 |
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Chapter 8 |
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28.04 |
31.04 |
4010.12 |
69.14 |
87.12 |
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Chapter 9 |
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28.06 |
31.05 |
4010.13 |
70.05 |
89.01 |
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Chapter 10 |
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28.08 |
Chapter 32 |
4010.19 |
70.06 |
89.02 |
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Chapter 11 |
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28.09 |
33.02 |
4010.31 |
70.07 |
89.04 |
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Chapter 12 |
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28.10 |
33.03 |
4010.32 |
70.08 |
92.01 |
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Chapter 13 |
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28.11 |
33.04 |
4011.10 |
70.09 |
92.02 |
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Chapter 14 |
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28.12 |
33.05 |
4011.99 |
70.10 |
92.04 |
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Chapter 15 |
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28.15 |
33.06 |
40.12 |
70.11 |
92.07 |
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Chapter 16 |
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28.17 |
33.07 |
4013.10 |
70.13 |
Chapter 93 |
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Chapter 22 |
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28.18 |
Chapter 34 |
40.15 |
72.08 |
Chapter 94 |
