Free Trade Agreement between the State of Israel and the Republic of Panama

str. 1FREE TRADE AGREEMENT BETWEEN THE STATE OF ISRAEL

AND THE REPUBLIC OF PANAMA

CHAPTER 2 - NATIONAL TREATMENT AND MARKET ACCESS TO GOODS

str. 1ANNEX 2-A: EXCEPTIONS TO NATIONAL TREATMENT AND IMPORT AND EXPORT RESTRICTIONS

ANNEX 2-B: SCHEDULE OF TARIFF ELIMINATION FOR INDUSTRIAL GOODS

SECTION A: TARIFF ELIMINATION IN ISRAEL FOR THE ORIGINATING GOODS OF PANAMA SECTION B: TARIFF ELIMINATION IN PANAMA FOR THE ORIGINATING GOODS OF ISRAEL

str. 1ANNEX 2-C: PREFERENTIAL TREATMENT FOR FISHERY PRODUCTS

SECTION A: PREFERENTIAL TREATMENT IN ISRAEL OF ORIGINATING GOODS OF PANAMA SECTION B: PREFERENTIAL TREATMENT IN PANAMA OF ORIGINATING GOODS OF ISRAEL

ANNEX 2-D: PREFERENTIAL TREATMENT FOR AGRICULTURAL GOODS

PREFERENTIAL TREATMENT IN PANAMA FOR ORIGINATING GOODS OF ISRAEL

str. 2CHAPTER 3 - RULES OF ORIGIN ANNEX 3-A: SPECIFIC RULES OF ORIGIN ANNEX 3-B : CERTIFICATE OF ORIGIN ANNEX 3-C: PROCEDURES REGARDING ELECTRONIC CERTIFICATES OF ORIGIN (ARTICLE 3.16) ANNEX 3- D: INVOICE DECLARATION PURSUANT TO ARTICLE 3.20 ANNEX 3-E:

APPROVED EXPORTER DECLARATION PURSUANT TO ARTICLE 3.21

CHAPTER 4 CUSTOMS PROCEDURES AND TRADE FACILITATION

ANNEX 4-A : MUTUAL ASSISTANCE IN CUSTOMS MATTERS

CHAPTER 5 - SANITARY AND PHYTOSANITARY MEASURES ANNEX 5-A: COMPETENT AUTHORITIES

CHAPTER 6

str. 2- TECHNICAL BARRIERS TO TRADE

CHAPTER 7 - TRADE REMEDIES

CHAPTER 8 - INVESTMENT ANNEX 8 -A : PRESENTATION OF DOCUMENTS TO A PARTY REGARDING ARTICLE 8.12

CHAPTER 9 - COMMERCE OF SERVICES ANNEX 9-A: LIST OF MFN EXEMPTIONS

CHAPTER 14

SECTION A: ISRAEL - LIST OF MFN EXEMPTIONS SECTION B: PANAMA - LIST OF MFN EXEMPTIONS

str. 3ANNEX 9-B: MOVEMENT OF NATURAL PERSONS SUPPLYING OF SERVICES ANNEX 9-C: FINANCIAL SERVICES ANNEX 9-D: TELECOMMUNICATION SERVICES ANNEX 9-E: SCHEDULES OF SPECIFIC COMMITMENTS

SECTION A: ISRAEL - LIST OF SPECIFIC COMMITMENTS

SECTION B: PANAMA - LIST OF SPECIFIC COMMITMENTS APPENDIX 9-E: MEASURES APPLIED TO RESERVED PROFESSIONAL SERVICES

str. 3- ELECTRONIC COMMERCE

- INTELLECTUAL PROPERTY RIGHTS

- ADMINISTRATION OF AGREEMENT

- TRADE AND ECONOMIC COOPERATION

- DISPUTES SETTLEMENT

ANNEX 14 -A: RULES OF PROCEDURE FOR ARBITRAL

TRIBUNAL PROCEEDING ANNEX 14-B : CODE OF CONDUCT

CHAPTER 15 - TRANSPARENCY

CHAPTER 16 -EXCEPTIONS

CHAPTER 17 - FINAL PROVISIONS

str. 5The Government of the State of Israel ('Israel') and the Government of the Republic of Panama ('Panama'), hereinafter referred to as 'the Parties', resolved to:

STRENGTHEN the special bonds of friendship and cooperation between them;

CONTRIBUTE to the harmonious development and expansion of world trade and provide a catalyst to broader international cooperation;

REDUCE obstacles to their bilateral trade;

STRENGTHEN their economic relations and to promote economic cooperation, in particular for the development of trade and investments;

PROMOTE the development of their trade with due regard to fair conditions of competition;

CREATE an expanded and secure market for their goods and services and establish clear and mutually advantageous rules in order to foster a predictable environment for their trade and investments;

EXPLORE the possibility of promoting the harmonious development of their trade as well as the expansion and diversification of their mutual cooperation in fields of common interest, including fields not covered by this Agreement;

REAFFIRM their membership in the World Trade Organization and their commitment to comply with their respective rights and obligations under the Marrakesh Agreement Establishing the World Trade Organization and other agreements to which they are both parties; and

HAVE AGREED , in pursuit of the above, to conclude the following Free Trade Agreement (hereinafter referred to as 'this Agreement'):

CHAPTER 1

SECTION A: GENERAL DEFINITIONS

ARTICLE 1.1: DEFINITIONS OF GENERAL APPLICATION

Customs Authorities means

str. 6- (a) for the State of Israel, the Customs Directorate of the Israel Tax Authority of the Ministry of Finance; and
- (b) for the Republic of Panama, the National Customs Authority ( Autoridad Nacional de Aduanas ),

or their successors

SECTION B: GENERAL PROVISIONS

ARTICLE 1.2: ESTABLISHMENT OF A FREE TRADE AREA

str. 9The Parties to this Agreement, in accordance with Article XXIV of the GATT 1994 and Article V of the GATS, hereby establish a free trade area.

ARTICLE 1.3: OBJECTIVES OF THE AGREEMENT

str. 9The objectives of this Agreement, as elaborated more specifically in its provisions are to:

1. eliminate barriers to trade and facilitate the movement of goods and services between the Parties;
2. promote fair conditions of competition relating to economic relations between the Parties;
3. substantially increase investment opportunities, as well as cooperation in areas which are of mutual interest to the Parties;
4. promote further bilateral and multilateral cooperation to expand and enhance the benefits of this Agreement; and
5. create effective procedures for the application and compliance with this Agreement and its joint administration.

ARTICLE 1.4: RELATION TO OTHER AGREEMENTS

str. 91. The Parties affirm their existing rights and obligations with respect to each other in accordance with the WTO Agreement and its successor agreements and other agreements to which both Parties are party. 2. When this Agreement refers to or incorporates by reference other agreements or legal instruments in whole or in part, those references include:

- (a) related footnotes, interpretative notes, and explanatory notes that are binding on both Parties; and
- (b) successor agreements to which the Parties are party or amendments binding on the Parties, except when the reference affirms existing rights.

ARTICLE 1.5: EXTENT OF OBLIGATIONS

str. 9Each Party shall ensure that necessary measures are taken in order to give effect to the provisions of this Agreement, including their observance by its central, regional and local governments and authorities.

ARTICLE 2.2: DEFINITIONS

CHAPTER 2

NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS

ARTICLE 2.1: SCOPE

str. 10Except as otherwise provided in this Agreement, this Chapter shall apply to trade in goods between the Parties.

SECTION A: DEFINITIONS

str. 11waiver of customs duties or the import license, or accord a preference to domestically produced goods; - (d) a person benefiting from a waiver of customs duties or an import license produce goods or supply services, in the territory of the Party granting the waiver of customs duties or the import license, with a given level or percentage of domestic content; or
- (e) relates in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows, but does not include a requirement that an imported good be:
- (f) subsequently exported;
- (g) used as a material in the production of another good that is subsequently exported;
- (h) substituted by an identical or similar good used as a material in the production of another good that is subsequently exported; or
- (i) substituted by an identical or similar good that is subsequently exported; and

printed advertising material means a good classified in Chapter 49 of the HS including a brochure, pamphlet, leaflet, trade catalogue, flyers, yearbook published by a trade association, tourist promotional material or poster, that is:

- (a) used to promote, publicize or advertise a good or service;
- (b) essentially intended to advertise a good or service; and
- (c) supplied free of charge.

SECTION B: NATIONAL TREATMENT

ARTICLE 2.3: NATIONAL TREATMENT

str. 111. Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of the GATT 1994. To this end, Article III of the GATT 1994, are incorporated into and made part of this Agreement, mutatis mutandis. 2. Paragraph 1 shall not apply to the measures set out in Annex 2-A

SECTION C: TARIFF ELIMINATION

str. 12Except as otherwise provided in this Agreement, each Party shall eliminate its customs duties on originating goods of the other Party, in accordance with Annex 2-B. 2. Except as otherwise provided in this Agreement, no Party may increase any existing customs duty, or adopt any customs duty, on an originating good of the other Party. 3. If, at any time, a Party reduces its applied customs tariff MFN after the date of entry into force of this Agreement, such tariff shall apply only if it is lower than the tariff resulting from the application of Annex 2-B. 4. On the request of either Party, the Parties shall consult to consider accelerating the elimination of customs duties set out in the Annex 2-B. 5. For greater certainty, a Party may:
6. (a) modify a tariff outside this Agreement on a good for which no tariff preference is claimed under this Agreement;
7. (b) raise a customs duty back to the level established in Annex 2-B, following a unilateral reduction; or
8. (c) maintain or increase a customs duty as authorized by the Dispute Settlement Body of the WTO.

ARTICLE 2.5: PREFERENTIAL TREATMENT FOR FISHERY GOODS

str. 121. The Parties grant tariff concessions to fishery goods originating in the Parties, as specified in Annex 2-C.
2. For greater certainty, a Party may:
3. (a) modify a tariff outside this Agreement on a good for which no tariff preference is claimed under this Agreement;
4. (b) raise a customs duty back to the level established in Annex 2-C, following a unilateral reduction; or
5. (c) maintain or increase a customs duty as authorized by the Dispute Settlement Body of the WTO.

SECTION D: SPECIAL REGIMES

str. 121. Each Party shall grant duty-free temporary admission for the following goods, regardless of their origin:
2. (a) professional equipment, including equipment for the press or television, software, and broadcasting and cinematographic equipment, necessary for carrying out the business activity, trade, or profession of a person who qualifies for temporary entry pursuant to the laws of the importing Party;
3. (b) goods admitted for sports purposes and goods intended for display or demonstration; and
4. (c) commercial samples and advertising films and recordings. 2. Each Party shall, upon request of the person concerned and for reasons its Customs Authority considers valid, extend the time limit for temporary admission beyond the period initially fixed. 3. No Party may condition the duty-free temporary admission of a good referred to in paragraph 1, other than to require that the good be:
7. (a) admitted by a national or resident of the other Party seeking temporary entry;
8. (b) used solely by or under the personal supervision of a national or resident of the other Party in the exercise of trade, business, professional, or sport activities;
9. (c) not sold or leased while in its territory;
10. (d) accompanied by a security in an amount no greater than the import duties and other charges that would otherwise be owed on entry or final importation, releasable on exportation of the good;
11. (e) capable of identification when exported;
12. (f) exported upon the departure of the person referenced in subparagraph (b), or within such other period related to the purpose of the temporary admission as the importing Party establish; or within one year, unless extened;
13. (g) admitted in no greater quantity than is reasonable for its intended use; or
14. (h) otherwise admissible into the Party's territory under its law. 4. If any condition that a Party imposes under paragraph 3 has not been fulfilled, the Party may apply the customs duty and any other charge that would normally be owed on the good plus any other charges or penalties provided for under its law.

str. 145. Each Party shall adopt and maintain procedures providing for the expeditious release of goods admitted under this Article. To the extent possible, these procedures shall provide that, when such goods accompany a national or resident of the other Party who is seeking temporary entry, the goods shall be released simultaneously with the entry of that national or resident. 6. Each Party shall permit a good temporarily admitted under this Article to be exported through a customs port other than that through which it was admitted. 7. Each Party shall provide that the importer or other person responsible for a good admitted under this Article shall not be liable for failure to export the good on presentation of satisfactory proof to the importing Party that the good has been destroyed within the original period fixed for temporary admission or any lawful extension thereof. 8. Except as otherwise provided in this Agreement, the Party shall not:
5. (a) prevent a vehicle or container used in international traffic that enters its territory from the territory of the other Party to exit its territory on any route that is reasonably related to the economic and prompt departure of such vehicle or container;
6. (b) require any security or impose any penalty or charge solely by reason of any difference between the port of entry and the port of departure of a vehicle or container;
7. (c) condition the release of any obligation, including any security, that it imposes in respect of the entry of a vehicle or container into its territory on its exit through any particular port of departure; and
8. (d) require that the vehicle or carrier bringing a container from the territory of the other Party into its territory be the same vehicle or carrier that takes the container to the territory of the other Party. 9. For purposes of paragraph 8, vehicle means a truck, a truck tractor, a tractor, a trailer unit or trailer, a locomotive, or a railway car or other railroad equipment.

ARTICLE 2.7: GOODS RE-ENTERED AFTER REPAIR OR ALTERATION

str. 15Neither Party shall apply a customs duty to a good, regardless of its origin, that reenters its territory after that good has been temporarily exported from its territory to the territory of the other Party for repair or alteration, regardless of whether such repair or alteration could be performed in the territory of the Party from which the good was exported for repair or alteration. 2. Neither Party shall apply a customs duty to a good, regardless of its origin, imported temporarily from the territory of the other Party for repair or alteration. 3. For purposes of this Article, repair or alteration does not include an operation or process that:

- (a) destroys a good's essential characteristics or creates a new or commercially different good; or
- (b) results in a change of the classification at a six digit level of the HS.

ARTICLE 2.8: DUTY- FREE ENTRY OF COMMERCIAL SAMPLES OF NEGLIGIBLE VALUE AND PRINTED ADVERTISING MATERIALS

str. 151. Each Party shall grant duty-free entry to commercial samples of negligible value, and printed advertising materials, imported from the territory of the other Party, regardless of their origin, however, it may require that:

- (a) such samples be imported solely for the solicitation of orders for goods, or services provided from the territory, of the other Party or a non-Party; or
- (b) such advertising materials be imported in packets that each contain no more than one copy of each material and that neither such materials nor the packets form part of a larger consignment.

SECTION E: NON-TARIFF MEASURES

ARTICLE 2.9: IMPORT AND EXPORT RESTRICITIONS

str. 151. Except as otherwise provided in this Agreement, neither Party may adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, except in accordance with Article XI of the GATT 1994. To this end, Article XI of the GATT 1994 are incorporated into and made a part of this Agreement, mutatis mutandis . 2. Paragraph 1 shall not apply to the measures set out in Annex 2-A

3. The Parties understand that the GATT 1994 rights and obligations incorporated by paragraph 1 prohibit, in any circumstances in which any other form of restriction is prohibited, a Party from adopting or maintaining:
2. (a) export and import price requirements, except as permitted in enforcement of countervailing and antidumping duty orders and undertakings;
3. (b) import licensing conditioned on the fulfillment of a performance requirement; or

- (c) voluntary export restraints inconsistent with Article VI of the GATT 1994, as implemented under Article 18 of the Subsidies Agreement and Article 8.1 of the Anti-dumping Agreement.

ARTICLE 2.10: IMPORT LICENSING PROCEDURES

str. 16No Party shall maintain or adopt a measure that is inconsistent with the Agreement on Import Licensing Procedures of the WTO (hereinafter referred to as the 'Import Licensing Agreement'), and the same is incorporated into this Agreement, mutatis mutandis .

ARTICLE 2.11: ADMINISTRATIVE FEES AND FORMALITIES

str. 161. Each Party shall ensure, in accordance with Article VIII of the GATT 1994, that all fees and charges of whatever character (other than customs duties, charges equivalent to an internal tax or other internal charge applied consistently with Article III:2 of the GATT 1994, and antidumping and countervailing duties) imposed on or in connection with importation or exportation are limited in amount to the approximate cost of services rendered and do not represent an indirect protection to domestic goods or a taxation of imports or exports for fiscal purposes.

ARTICLE 2.12: DUTIES ON EXPORTS

str. 161. Neither Party may adopt or maintain any duty, tax, or other charge on the export of any good to the territory of the other Party. 2. Paragraph 1 shall not apply to measures set out in Annex 2-A

ARTICLE 2.13: BALANCE OF PAYMENTS

str. 16The rights and obligations of the Parties relating to balance of payments shall be governed by the Understanding on the Balance-of-Payments Provisions of the General Agreement on Tariffs and Trade 1994 , part of Annex 1A of the WTO Agreement.

SECTION F: OTHER MEASURES

ARTICLE 2.14: CUSTOM VALUATION

str. 161. The Customs Valuation Agreement and any successor agreement shall govern customs valuation rules applied by the Parties to their reciprocal trade. To this end, the

Customs Valuation Agreement and any successor agreement are incorporated and made part of this Agreement, mutatis mutandis .

str. 172. Customs legislation of each Party shall comply with Article VII of the GATT 1994 and the Customs Valuation Agreement.

ARTICLE 2.15: COMMITTEE ON TRADE IN GOODS

str. 171. The Parties hereby establish a Committee on Trade in Goods, (hereinafter the Committee), comprising representatives of each Party. 2. Committee meetings and any Ad-hoc working group will be chaired by representatives of the Ministry of Economy and Industry of the State of Israel and the Ministry of Commerce and Industries of the Republic of Panama (Ministerio de Comercio e Industrias de la República de Panamá) , or their respective successors. 3. The Committee shall have the following functions:
4. (a) monitoring the implementation and administration of this Chapter;
5. (b) promoting trade in goods between the Parties, including through consultations on accelerating tariff elimination under this Agreement, and other issues as appropriate;
6. (c) addressing barriers to trade in goods between the Parties, especially those related to the application of non-tariff measures, and, if appropriate, referring such matters to the Joint Committee as referred to in Article 12.1 (Establishment and Functions of the Joint Committee), for its consideration;
7. (d) reviewing the amendments to the HS to ensure that each Party's obligations under this Agreement are not altered, and if necessary consult to resolve any conflicts;
8. (e) establish Ad-hoc working groups with specific mandates; and
9. (f) consider any other matter arising under this Chapter. 10. (g) carry out the assignments arising by Chapter 5 (Sanitary and Phytosanitary Measures) and Chapter 6 (Techincal Barriers to Trade)
4. All decisions of the Committee shall be taken by mutual agreement.

SECTION G: AGRICULTURE

ARTICLE 2.17: PREFERENTIAL TREATMENT OF AGRICULTURAL GOODS

str. 181. The Parties grant tariff concessions and reduce or eliminate customs duties to agricultural goods originating in the Parties, as indicated in the Annex 2-D.
2. For greater certainty, a Party may:
3. (a) modify a tariff outside this Agreement on a good for which no tariff preference is claimed under this Agreement;
4. (b) raise a customs duty back to the level established in Annex 2-D, following a unilateral reduction; or
5. (c) maintain or increase a customs duty as authorized by the Dispute Settlement Body of the WTO.

ARTICLE 2.18: ADMINISTRATION AND IMPLEMENTATION OF TARIFF-RATE QUOTAS

str. 181. Each Party shall implement and administer tariff rate quotas for imports of agricultural goods set out in Annex 2-D in accordance with Article XIII of GATT 1994, and the Import Licensing Agreement. 2. Upon request of the exporting Party, the importing Party shall provide information to the exporting Party with respect to the administration of the tariff rate quotas of the importing Party.

ARTICLE 2.19: EXPORT SUBSIDIES

str. 181. The Parties share the objective of eliminating export subsidies for agricultural goods in the framework of the WTO negotiations. This is without prejudice to the rights of the Parties in those multilateral negotiations. 2. From the entry into force of this Agreement, no Party may adopt or maintain any export subsidy on any agricultural good destined for the territory of the other Party.

str. 193. Notwithstanding paragraph 2, a Party may adopt or maintain an export subsidy in accordance with its law and its WTO commitments on an agricultural good that is exported to the other Party. A Party which is considering the application of a measure to counter the effects of the export subsidy shall discuss, at the request of the other Party, with a view to agreeing on such measures that either Party may adopt in accordance with the laws of a Party and its WTO commitments. If no mutually satisfactory measures are agreed upon, the importing Party may increase the rate of duty on such imports up to the applied MFN tariff rate.

ANNEX 2-A

SECTION A: MEASURES OF ISRAEL

str. 20The provisions of Articles 2.3, 2.9, and 2.12 shall not apply to measures adopted by Israel with respect of:

- (a) controls and charges maintained by Israel on the export of metal waste and scrap;
- (b) Israeli law on imports of non-kosher meat. - (c) actions authorized by the Dispute Settlement Body of the WTO .

SECTION B: MEASURES OF PANAMA

str. 20The provisions of Articles 2.3 and 2.9 shall not apply to measures adopted by Panama in respect of:

- (a) a measure to regulate the importation of lottery tickets in official circulation pursuant to Cabinet Decree No. 19 of June 30, 2004;
- (b) import controls on used vehicles pursuant to Law No. 36 of May 17, 1996;
- (c) a measure regulating the importation of used motor vehicles, pursuant to Law No. 45 of October 31, 2007;
- (d) import controls of video and other games classified under heading 95.04 providing cash prizes pursuant to Decree-Law No. 2 of February 10, 1998; and

- (e) actions authorized by the Dispute Settlement Body of the WTO.

SCHEDULES OF TARIFF ELIMINATION FOR INDUSTRIAL GOODS

str. 211. Except as otherwise provided in a Party's Schedule to this Annex, the following staging categories apply to the elimination of customs duties by each Party pursuant to Article 2.4: (Tariff Elimination for Industrial Goods):
2. (a) duties on goods not listed under any Category shall be abolished on the date of entry into force of this Agreement
3. (b) duties on originating goods provided for in the items in staging Category B3 in a Party's Schedule shall be removed in three equal annual stages beginning on the date this Agreement enters into force, and such goods shall be duty-free, effective January 1 of year three (3);
4. (c) duties on originating goods provided for in the items in staging Category B5 in a Party's Schedule shall be removed in five equal annual stages beginning on the date this Agreement enters into force, and such goods shall be duty-free, effective January 1 of year five (5);
5. (d) duties on originating goods provided for in the items in staging Category B7 in a Party's Schedule shall be removed in seven equal annual stages beginning on the date this Agreement enters into force, and such goods shall be duty-free, effective January 1 of year seven (7);
6. (e) duties on originating goods provided for in the items in staging Category C10 in a Party's Schedule shall be removed in ten equal annual stages beginning on the date this Agreement enters into force, and such goods shall be duty-free, effective January 1 of year ten (10);
7. (f) duties on originating goods provided for in the items in staging Category D15 in a Party's Schedule shall be removed in fifteen equal annual stages beginning on the date this Agreement enters into force, and such goods shall be duty-free, effective January 1 of year fifteen (15);
2. The base rate of customs duty and staging category for determining the interim rate of customs duty at each stage of reduction for an item are indicated for the item in each Party's Schedule. 3. For purposes of this Annex and a Party's Schedule, year one (1) means the year this Agreement enters into force as provided in Article 17.3 (Entry into Force). 4. For purposes of this Annex and a Party's Schedule, beginning in year two (2), each annual stage of tariff reduction shall take effect on January 1 of the relevant year.

SECTION A: TARIFF ELIMINATION IN ISRAEL FOR THE ORIGINATING GOODS OF PANAMA

SECTION B: TARIFF ELIMINATION IN PANAMA FOR THE ORIGINATING GOODS OF ISRAEL

ANNEX 2-C

PREFERENTIAL TREATMENT FOR FISHERY GOODS

str. 82Except as otherwise provided in a Party's Schedule to this Annex, the following staging categories apply to the elimination of customs duties by each Party pursuant to Article 2.5 (Preferential Treatment for Fishery Goods):

- (a) duties on originating goods provided for in the items in staging Category A in a Party's Schedule shall be eliminated entirely, and such goods shall be duty-free on the date this Agreement enters into force;
- (b) duties on originating goods provided for in the items in staging Category Q in a Party's Schedule shall eliminated or reduced as specified for each tariff line;
- (c) duties on goods not listed under any category will maintain the MFN customs duties. These goods are excluded from duty elimination or reduction duties.

ANNEX 2-C -1

SECTION A: PREFERENTIAL TREATMENT IN ISRAEL OF ORIGINATING GOOD OF PANAMA

ANNEX 2-D PREFERENTIAL TREATMENT FOR AGRICULTURAL GOODS

ANNEX 2-D -1

SECTION A: PREFERENTIAL TREATMENT IN ISRAEL FOR ORIGINATING GOODS OF PANAMA

SECTION B: PREFERENTIAL TREATMENT IN PANAMA FOR ORIGINATING GOOD OF ISRAEL

CHAPTER 3 RULES OF ORIGIN

ARTICLE 3.1: DEFINITIONS

For the purposes of this Chapter:

ARTICLE 3.2: GENERAL REQUIREMENTS

str. 118For the purpose of this Chapter, the following products shall be considered as originating in a Party:

- (a) products wholly obtained or produced in a Party, in according with Article 3.4;
- (b) products obtained in a Party incorporating non-originating materials which have not been wholly obtained there, provided that such materials have undergone sufficient worked or processed in the Party within the meaning of Article 3.5.

ARTICLE 3.3: CUMULATION

1. Bilateral Cumulation

str. 118Notwithstanding Article 3.2, goods that originate in a Party, shall be considered as goods originating in the other Party and it shall not be necessary that such goods had undergone working or processing.

2. Diagonal Cumulation

str. 118Where each Party entered or will enter separately into a free trade agreement under Article XXIV of the GATT 1994 with the same non-Party, and the goods qualify for tariff preferences under the agreement of one of the Parties with the non-Party, the goods will be considered as originating goods according to the present Agreement, if they are used as a material in the production of another good in the territory of the other Party. 3. A Party shall apply paragraph 2, only when the free trade agreement between each Party and the non-Party are in force.

str. 119Forthe purposes of Article 3.2(a), the following shall be considered as wholly produced or obtained by the Parties:

- (a) mineral products extracted from the soil or subsoil of any of the Parties, including its territorial seas, continental shelf or exclusive economic zone;
- (b) plants and vegetable products grown, harvested, picked or gathered there, including in their territorial seas, exclusive economic zone or continental shelf;
- (c) live animals born and raised there, including by aquaculture;
- (d) products from live animals as in subparagraph (c);
- (e) animals and products obtained by hunting, trapping, collecting, fishing and capturing in a Party; including in its territorial seas, continental shelf or in the exclusive economic zone;
- (f) used articles collected there fit only for the recovery of raw materials;
- (g) waste and scrap resulting from utilization, consumption or manufacturing operations conducted there;
- (h) products of sea fishing and other products taken from the waters in the high seas (outside the continental shelf or in the exclusive economic zone of the Parties), only by their vessels;
- (i) products of sea fishing obtained, only by their vessels, under a specific quota or other fishing rights allocated to a Party by the international agreements to which the Parties are parties;
- (j) products made aboard their factory ships exclusively from products referred to in subparagraphs (h) and (i);
- (k) products obtained from the seabed and subsoil, in those maritime areas beyond the territorial sea of either Party, over which that Party, in accordance with international law or the laws of a Party, exercises sovereign rights or jurisdiction. - (l) goods produced in any of the Parties exclusively from the products specified in subparagraphs (a) to (g). 2.

str. 120The terms 'their vessels' and 'their factory ships' in paragraph 1(h), 1(i) and 1(j) shall apply only to vessels and factory ships:

- (a) which are flagged and registered or recorded in a Party; and - (b) which are owned by a natural person with domicile in that Party or by a commercial company with domicile in that Party, established and registered in accordance with the laws of the Party and performing its activities in conformity with the laws and regulations of the Party.

ARTICLE 3.5: SUFFICIENTLY WORKED OR PROCESSED PRODUCTS

str. 1201. For the purpose of Article 3.2, a product is considered to be originating if the nonoriginating materials used in its manufacture undergo working or processing beyond the operations referred to in Article 3.6; and

- a) the production process results in a tariff change of the non-originating materials from a four-digit heading of the HS into another four-digit heading; or
- b) the value of all non-originating materials used in its manufacture does not exceed 50 % of the ex-works price; or
- c) if the product falls within the classifications included in the list in Annex 3-A, subparagraphs (a) and (b) above shall not apply. In this case it must fulfill the specific rule detailed therein. 2. A product will be considered as having undergone a change in tariff classification pursuant to subparagraph 1(a) if the value of all non-originating materials which have been used in the production of the good and have not undergone the change which must be applied in tariff classification do not exceed 10% of the ex-works value of the product. 3. The Committee, established in the Article 4.13 (Committee on Rules of Origen and Customs Procedures and Trade Facilitation) may recommend to the Joint Committee any modification for specific rules of origin by mutual agreement.

ARTICLE 3.6: INSUFFICIENT WORKING OR PROCESSING

str. 121The following operations shall be considered as insufficient working or processing to confer the status of originating products, whether or not the requirements of Article 3.5 are satisfied:

- (a) preserving operations to ensure that the products remain in good condition during transport and storage;
- (b) simple changing of packaging and breaking-up and assembly of packages;
- (c) washing, cleaning, removal of dust, oxide, oil, paint or other coverings;
- (d) simple painting and polishing operations, including applying oil;
- (e) husking, partial or total bleaching, polishing, and glazing of cereals and rice;
- (f) ironing or pressing of textiles; - (g) operations to colour 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) affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging;
- (l) dilution in water or other substances, providing that the characteristics of the products remain unchanged;
- (m) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;
- (n) simple assembly of parts of articles to constitute a complete article or disassembly of products into parts;
- (o) simple mixing of products, whether or not of different kinds;
- (p) slaughter of animals;
- (q) a combination of two or more of the above operations.

ARTICLE 3.7: UNIT OF QUALIFICATION

str. 1211. The unit of qualification for the application of the provisions of this Chapter shall be the particular product which is considered as the basic unit when determining classification using the nomenclature of the HS. 2. Pursuant to paragraph 1, it follows that:
2. (a) when a product composed of a group or assembly of articles is classified under the terms of the HS in a single heading, the whole constitutes the unit of qualification;
3. (b) when a consignment consists of a number of identical products classified under the same heading of the HS, each product must be taken individually when applying the provisions of this Chapter. 3. Where , under General Rule 5 of the HS, packaging is included with the product for classification purposes, it shall be included for the purposes of determining origin. 4. Subject to General Rule 5 of the HS, when the products qualify as wholly obtained according to Article 3.4, the packaging shall not be taken into consideration for the

ARTICLE 3.8: ACCOUNTING SEGREGATION

ARTICLE 3.9: ACCESSORIES, SPARE PARTS AND TOOLS

str. 122Accessories, spare parts and tools dispatched with a piece of equipment, machine, apparatus or vehicle, which are part of the normal equipment and included in the price

thereof or which are not separately invoiced, shall be regarded as one with the piece of equipment, machine, apparatus or vehicle in question.

ARTICLE 3.10: SETS

str. 123Sets, as defined in General Rule 3 of the HS, shall be regarded as originating when all component goods are originating. Nevertheless, when a set is composed of originating and non-originating goods, the set as a whole shall be regarded as originating, provided that the CIF value of the non-originating goods does not exceed 20% of the ex-works price of the set.

ARTICLE 3.11: NEUTRAL ELEMENTS

str. 123In order to determine whether a product originates, it shall not be necessary to determine the origin of the following which might be used in its manufacture:

- (a) energy and fuel;
- (b) plant and equipment;
- (c) machines and tools;
- (d) goods which do not enter into the final composition of the product.

ARTICLE 3.12: PRINCIPLE OF TERRITORIALITY

str. 1231. Except as provided for in Article 3.3 and paragraph 3 of this Article, the conditions for acquiring originating status set out in Article 3.5 must be fulfilled without interruption in the Parties. 2. Where originating goods exported from the Parties to a third- country, returned to the exporting Party, they must be considered as non-originating, unless it can be demonstrated to the satisfaction of the customs authorities that:

- (a) the returning goods are the same as those exported; and
- (b) they have not undergone any operation beyond that necessary to preserve them in good condition while in that third-country or while being exported. 3. The acquisition of originating status in accordance with the conditions set out in this Chapter shall not be affected by working or processing done outside the Parties on materials exported from the Parties and subsequently re-imported there, provided that:

- (a) the said materials are wholly obtained in the Parties or have undergone working or processing beyond the operations referred to in Article 3.6 prior to being exported; and
- (b) it can be demonstrated to the satisfaction of the customs authorities that:

str. 124- (i) re-imported goods have been obtained by working or processing the exported materials; and
- (ii) total added value acquired outside the Parties by applying the provisions of this Article does not exceed 20% of the ex-works price of the end product for which originating status is claimed. 4. For the purposes of applying the provisions of paragraph 3:
- (a) 'total added value' shall be taken to mean all costs arising outside the Parties, including the value of the materials incorporated there;
- (b) the total added value as detailed in paragraph (a) shall be considered as non-originating materials for the purposes of Article 3.5.1(b) or Annex 3A (Product Specific Rules of Origin). 5. The provisions of paragraph 3 shall not apply to products which do not fulfil the conditions set out in Article 3.5, and to products of Chapters 1 to 24, Chapter 34, Chapter 39 and Chapter 48 of the HS. 6. In the cases where paragraph 3 applies, that fact will be indicated in Field No. 13 in the Certificate of Origin, in accordance with Annex 3-B.

ARTICLE 3.13: DIRECT TRANSPORT

str. 1241. The preferential treatment provided under this Agreement applies only to products, satisfying the requirements of this Chapter, which are transported directly between the Parties. 2. However, products originating in the territories of the Parties and constituting one single consignment which is not split up may be transported through other territories with, should the occasion arise, transshipment or temporary warehousing in such territories, under the surveillance of the customs authorities therein, provided that:

- (a) the transit is justified for geographical or international transport;
- (b) during transit or transshipment the goods have not been processed; or
- (c) have not undergone operations other than unloading, reloading or any operation designed to preserve them in good condition. 3.

str. 125Evidence that the conditions set out in paragraph 1 have been fulfilled shall be supplied to the customs authorities of the importing Party by the production of:

- (a) any single transport document, that meets international standards and that proves that the goods were directly transported from the exporting Party

- through the third country where the goods are in transit to the importing Party; or

- (b) a certificate issued by the customs authorities of the third country where the goods were in transit which contains an exact description of the goods, the date and place the loading and reloading of the goods in that third country and the conditions under which the good were placed; or
- (c) in the absence of any of the above documents, any other documents that will prove the direct shipment. 4. Goods exported from one of the Parties will retain their originating status when they are reimported into that Party. 5. Notwithstanding the provisions in paragraphs 1 and 2, originating goods of one Party that entered the territory of a non-Party shall not lose their originating status on the condition that they have not undergone additional processing other than that detailed in Article 3.6. For the purpose of this paragraph, the exporter in the territory of the exporting Party shall be responsible for all operations the goods have undergone in a non-Party, and shall indicate in the Certificate of Origin which operations, as listed in Article 3.6, the goods have undergone.

ARTICLE 3.14: RE-EXPORTED GOODS

str. 1251. Goods re-exported from a free zone located in the territory of one Party (hereinafter referred to as the "reexporting Party"), to the territory of the other Party (hereinafter referred to as the importing Party"), shall maintain the originating status granted under a preferential trade agreement in accordance with Article XXIV of the GATT 1994 between the importing Party and a non-Party (hereinafter referred to as the "preferential trade agreement"), subject to the provisions established in paragraph 2 . 2. For the purpose of the application of paragraph 1, it is required that:
2. (a) the goods remained under customs control and supervision, of the reexporting Party;
3. (b) the goods have not undergone operations besides those allowed by the preferential trade agreement. Unless otherwise provided by the preferential trade agreement, these operations may include: transshipment, warehousing, deconsolidation or splitting up of consignments, sales, packaging, bottling, making up of sets, labeling of packages or consolidation;
4. (c) the goods have not undergone production in the free zones; and
5. (d) all other provisions of the said preferential trade agreement are fulfilled.

str. 1263. The importer that requests preferential tariff treatment in accordance with the preferential trade agreement between the importing Party and the non-Party shall present, together with the Certificate of Origin or preferential document according to the preferential trade agreement, a certificate of reexportation or any other document that confirms and specifies the operations that the goods have undergone and that they remained under customs control. 4. The provisions of this Article shall not prejudice the preferential trade agreement between the importing Party and the non-Party. In case of contradiction between the provisions of this article and the preferential trade agreement between the importing Party and the non-Party, the preferential trade agreement shall prevail.

ARTICLE 3.15: EXHIBITIONS

str. 1261. Originating goods, sent for exhibition to a third country other than the Parties and sold after the exhibition for importation in the Parties shall benefit on importation from the provisions of this Agreement providing the satisfaction of the customs authorities that:

- (a) an exporter has consigned these goods from the Parties to the third country in which the exhibition is held and has exhibited them there;
- (b) the goods have been sold or otherwise disposed of by that exporter to a person in the Parties;
- (c) the goods have been consigned during the exhibition or immediately thereafter in the third country to which they were sent for exhibition; and
- (d) the goods have not been used, since they were consigned for exhibition, for any purpose other than demonstration at the exhibition. 2. A proof of origin must be issued or made out in accordance with the provisions of this Chapter and submitted to the customs authorities of the importing Party in the normal manner. The name and address of the exhibition must be indicated thereon. 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 goods, and during which the goods remain under customs control.

ARTICLE 3.16: GENERAL REQUIREMENTS FOR PROOF OF ORIGIN

str. 126For the purpose of this Chapter, Certificate of Origin means either an Electronic Certificate of Origin or a Paper Certificate of Origin. 1. Products originating in a Party, on importation into the other Party, shall, benefit from this Agreement upon submission in accordance with the law of the importing Party of one of the following proofs of origin:

- (a) a Certificate of

str. 127Origin, set out in Annex 3-B; or
- (b) in the cases specified in Article 3.20, a declaration, subsequently referred to as the 'Invoice Declaration' given by an exporter on an invoice, which describes the products concerned in sufficient detail to enable them to be identified; the text of the Invoice Declaration is set outs in Annex 3-D; or
- (c) in the cases specified in Article 3.21, a declaration, subsequently referred to as the 'Approved Exporter Declaration' given by an Approved Exporter on an invoice, which describes the products concerned in sufficient detail to enable them to be identified. ; the text of the Approved Exporter Declaration is set out in Annex 3-E.
2. Notwithstanding paragraph 1, originating products within the meaning of this Chapter shall, in the cases specified in Article 3.25, benefit from this Agreement without submit any of the documents referred to above.

ARTICLE 3.17: PROCEDURES FOR THE ISSUANCE OF CERTIFICATES OF ORIGIN

str. 1271. Certificates of Origin shall be issued by the competent authorities of the exporting Party, either upon an electronic application or an application in paper form, by the exporter or under the exporter's responsibility by his authorized representative, in accordance with the law of the exporting Party. 2. For the purpose of paragraph 1, the exporter or his authorized representative shall fill out the electronic or paper form in accordance with Annex 3-B. These forms shall be completed in English. In special cases, the importing Party may require a translation of the Certificate of Origin. 3. The exporter applying for the issuance of a Certificate of Origin shall be prepared to submit at any time, at the request of the customs authorities of the exporting Party, all appropriate documents proving the originating status of the goods concerned, as well as the fulfillment of the other requirements of this Chapter. 4. Certificates of Origin shall be issued if the goods to be exported can be considered as products originating in the exporting Party in accordance with this Chapter. 5. The competent authorities shall take any steps necessary to verify the originating status of the products and the fulfillment of the other requirements of this Chapter. For this purpose, they shall have the right to require any evidence and to carry out any inspection of the exporter's books or any other check considered appropriate. 6. Each Certificate of Origin will be assigned a specific number by the issuing competent authorities. 7.

str. 128Certificates of Origin shall be issued by the competent authorities and made available tothe exporter as soon as the actual exportation has been effected or ensured.

ARTICLE 3.18: CERTIFICATES OF ORIGIN ISSUED RETROSPECTIVELY

str. 1281. Notwithstanding Article 3.17.7, a Certificate of Origin may exceptionally be issued after exportation of the products to which it relates if it was not issued at the time of exportation because of errors or involuntary omissions or special circumstances or it is demonstrated to the satisfaction of the competent authorities that the Certificate was issued but was not accepted at importation for technical reasons. 2. For the implementation of paragraph 1, the exporter must indicate in his application the place and date of exportation of the products to which the Certificate of Origin relates, and state the reasons for his request. 3. The issuing competent authorities may issue a Certificate of Origin retrospectively only after verifying that the information supplied in the exporter's application agrees with that in the corresponding file. 4. It shall be indicated on the Certificates of Origin issued in accordance with this Article that they were issued retrospectively in the Field No. 13, as detailed in Annex 3B. 5. The provisions of this Article may also be applied to goods that on the date of entry into force of the Agreement are either in transit or are in Israel or in Panama in temporary storage under customs control, subject to the submission to the competent authorities of the importing Party, within six (6) months of the said date, of a Certificate of Origin issued retrospectively by the competent authorities of the exporting Party together with the documents showing that the goods have been transported directly in accordance with the provisions of Article 3.13.

ARTICLE 3.19: DUPLICATE CERTIFICATES OF ORIGIN

str. 1281. In the event of theft, loss or destruction of a Certificate of Origin in paper form, the exporter may apply to competent authorities that issued it for a duplicate made out on the basis of the export documents in their possession. 2. The Certificates of Origin shall indicate, in Field No. 13 that they are duplicates, as detailed in Annex 3-B. 3. The duplicate, shall bear the date of issue of the original Certificate of Origin, and shall take effect as from that date.

ARTICLE 3.20: CONDITIONS FOR MAKING OUT AN INVOICE DECLARATION

str. 1281. An Invoice Declaration as referred to in Article 3.16.1(b) may be made out by any exporter where the value of the originating good does not exceed one thousand US dollar (USD 1.000). An invoice declaration as referred to in Article 3.16(1)(c) may only be made out by an approved exporter as per Article 3.21.

str. 1292. The exporter or the approved exporter making out an invoice declaration shall be prepared to submit at any time, at the request of the competent authorities of the exporting Party, all appropriate documents proving the originating status of the products concerned, as well as the fulfilment of the other requirements of this Chapter. 3. An Invoice Declaration, which text appears in Annex 3-D shall be made out either by the approved exporter as per Article 3.21, or the exporter as per Article 3.16(1)(b) by typing, or handwriting in printed characters on the invoice, the delivery note or another commercial document.

ARTICLE 3.21: APPROVED EXPORTERS

str. 1291. The competent authorities of the exporting Party may grant the status of 'approved exporter' to any exporter, who makes frequent shipments of products under this Agreement, in order to make out invoice declarations irrespective of the value of the products concerned. An exporter seeking such authorisation must offer to the satisfaction of the competent authorities all guarantees necessary to verify the originating status of the products as well as the fulfilment of the other requirements of this Chapter. 2. The competent authorities may grant the status of approved exporter subject to any conditions which they consider appropriate. 3. The competent authorities shall provide the approved exporter with a customs authorisation number which shall be indicated on the Invoice Declaration. 4. The competent authorities shall monitor the use of the authorisation by the approved exporter. 5. The competent authorities may withdraw the authorization at any time. It shall do so where the approved exporter no longer offers the guarantees referred to in paragraph 1, no longer fulfils the conditions referred to in paragraph 2 or otherwise makes an incorrect use of the authorization.

ARTICLE 3.22: VALIDITY OF PROOF OF ORIGIN

str. 1291. Proof of origin shall be valid for twelve (12) months from the date of issue in the exporting Party, and must be submitted within that period to the customs authorities of the importing Party. 2. Proof of origin which are submitted to the customs authorities of the importing Party after the final date for presentation specified in paragraph 1 may be accepted for the purpose of applying preferential treatment, where the failure to submit these documents by the final date set is due to exceptional circumstances. 3. In other cases of belated presentation, the customs authorities of the importing Party may accept the proofs of origin where the products have been submitted before the said final date.

ARTICLE 3.23: SUBMI

str. 130SSION OF PROOF OF ORIGIN

Proof of origin shall be submitted to the customs authorities of the importing Party in accordance with the procedures applicable in that Party. Those authorities may require the import declaration to be accompanied by a statement from the importer to the effect that the products meet the conditions required for the implementation of this Agreement.

ARTICLE 3.24: IMPORTATION BY INSTALLMENTS

str. 130Where, at the request of the importer and on the conditions laid down by the customs authorities of the importing Party, dismantled or non-assembled products within the meaning of General Rule 2(a) of the HS are imported by installments; a single proof of origin for such products shall be submitted to the customs authorities upon importation of the first installment.

ARTICLE 3.25: EXEMPTIONS FROM PROOF OF ORIGIN

str. 1301. Products sent as small packages from private persons to private persons or forming part of travellers' personal luggage shall be admitted as originating products without requiring the submission of a proof of origin, provided that such products are not imported by way of trade and have been declared as meeting the requirements of this Chapter and where there is no doubt as to the veracity of such a declaration. In the case of products sent by post, this declaration can be made on the customs declaration or on a sheet of paper annexed to that document. 2. Imports which are occasional and consist solely of products for the personal use of the recipients or travellers or their families shall not be considered as imports by way of trade if the nature and quantity of the products is not for commercial purpose. 3. Furthermore, the total value of these products shall not exceed five hundred US dollar (USD 500) in the case of small packages or one thousand US dollar (USD 1,000) in the case of products forming part of travellers' personal luggage.

ARTICLE 3.26: AMOUNTS EXPRESSED IN US DOLLAR

str. 1301. For the application of the provisions of Article 3.20 and Article 3.25(3) of this Chapter in cases where products are invoiced in a currency other than US dollar, amounts in the national currencies of the Parties equivalent to the amounts expressed in US dollar shall be fixed annually by each of the Parties. 2. A consignment shall benefit from the provisions of Articles 3.20 and 3.25(3) by reference to the currency in which the invoice is drawn up, according to the amount fixed by the Party concerned. 3. The amounts to be used in any given national currency shall be the equivalent in that currency of the amounts expressed in US dollar as at the first working day of October.

str. 131The amounts shall be communicated to the competent authorities the other Party by October 15 and shall apply from January 1 the following year. 4. A Party may round up or down the amount resulting from the conversion into its national currency of an amount expressed in US dollar. The rounded off amount may not differ from the amount resulting from the conversion by more than 5%. A country may retain unchanged its national currency equivalent of an amount expressed in USD if, at the time of the annual adjustment provided for in paragraph 3, the conversion of that amount, prior to any rounding off, results in an increase of less than 15% in the national currency equivalent. The national currency equivalent may be retained unchanged if the conversion would result in a decrease in that equivalent value.

ARTICLE 3.27: SUPPORTING DOCUMENTS

str. 1311. The documents referred to in Articles 3.17(3) and 3.20(2) used for the purpose of proving that products covered by a Certificate of Origin or an Invoice Declaration can be considered as products originating in the Parties and fulfill the other requirements of this Chapter may consist inter alia of the following:

- (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 bookkeeping;
- (b) documents proving the originating status of materials used, issued or made out in the Parties where these documents are used in accordance with the laws of the Parties;
- (c) documents proving the working or processing of materials in the Parties, issued or made out in the Parties, where these documents are used in accordance with the laws of the Parties;
- (d) Certificates of Origin or invoice declarations proving the originating status of materials used, issued or made out in the Parties in accordance with this Chapter;
- (e) appropriate evidence concerning working or processing undergone outside Israel or Panama by application of Article 3.12, proving that the requirements of that Article have been satisfied. 2. In the case where an operator situated in a third country which is not the exporting Party, issues an invoice covering the consignment, that fact shall be indicated in the Certificate of Origin in accordance with Annex 3-B.

ARTICLE 3.28: PRESERVATION OF PROOF OF ORIGIN AND SUPPORTING DOCUMENTS

str. 1311. The exporter applying for the issue of the Certificate of Origin shall keep for at least five (5) years the documents referred to in Article 3.17(3) as well as the supporting documents to the certificate of origin. 2. The exporter making out an Invoice Declaration shall keep for at least five (5) years a copy of this Invoice Declaration, as well as the documents referred to in Article 3.20(2). 3. The competent authorities in the exporting

str. 132Party that issued a Certificate of Origin shall keep for at least five (5) years any document relating to the application procedure referred to in Article 3.17(2). 4. The competent authorities of the importing Party shall keep for at least five (5) years the Certificates of Origin and the Invoice Declarations submitted to them.

ARTICLE 3.29: DISCREPANCIES AND FORMAL ERRORS

str. 1321. The discovery of slight discrepancies between the statements made in the proofs of origin and those made in the documents submitted to the customs office for the purpose of carrying out the formalities for importing the products shall not ipso facto render the proofs of origin null and void if it is duly established that this document does correspond to the products submitted. 2. Obvious formal errors on a proof of origin should not cause this document to be rejected if these errors are not such as to create doubts concerning the correctness of the statements made in this document.

ARTICLE 3.30: MUTUAL ASSISTANCE

str. 1321. The customs authorities of the Parties shall provide each other with the addresses of the customs authorities responsible for verifying Certificates of Origin and Invoice Declarations. 2. In order to ensure the proper application of this Chapter, the customs authorities of the Parties shall assist each other, through their respective customs authorities, in checking the authenticity of the Certificates of Origin, the Invoice Declarations and the correctness of the information given in these documents. To the extent of each Party's competence, its resources and in accordance with its law, such assistance shall include, inter alia , granting, to the designated customs officers from one Party, access to the other Party's website where the Certificates of Origin are stored.

ARTICLE 3.31: VERIFICATION OF PROOFS OF ORIGIN

str. 1321. Subsequent verifications of proofs of origin shall be carried out at random or whenever the customs authorities of the importing Party have reasonable doubts of the authenticity of proofs of origin, the originating status of the products concerned or the fulfilment 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 transmit requests for verification of origin through

electronic means to the customs authorities of the exporting Party. The request for verification shall include the number of the Certificate of Origin or in the case of an Invoice Declaration, a copy thereof. In support of the request for verification, where needed, the reasons for the request should be indicated, and any documents and information obtained suggesting that the information given on the proofs of origin is incorrect should be attached.

str. 1333. The verification shall be carried out by the customs authorities of the exporting Party. For this purpose, they shall have the right to call for any evidence and to carry out any inspection of the exporter's books or any other check considered appropriate. 4. If the customs authorities of the importing Party decide to suspend the granting of preferential treatment to the products concerned while awaiting the results of the verification, release of the products shall be offered to the importer subject to any precautionary measures judged necessary. 5. The customs authorities requesting the verification shall be informed of the results of this verification by electronic means as soon as possible, but not later than ten (10) months from the date of the request. These results must indicate clearly whether the information contained in the proofs of origin and the supporting documents is correct, and whether the products concerned can be considered as products originating in the Parties and fulfil the other requirements of this Chapter. 6. If in cases of reasonable doubt there is no reply within ten (10) months of the date of the verification request or if the reply does not contain sufficient information to determine the authenticity of the proofs of origin or the real origin of the products, the requesting customs authorities shall, except in exceptional circumstances, refuse entitlement to the preferences. 7. This Article shall not preclude the exchange of information or the granting of any other assistance as provided for in customs cooperation agreements. 8. Where disputes arise in relation to the verification procedures which cannot be settled between the customs authorities requesting a verification and the customs authorities responsible for carrying out the verification or with respect to the interpretation of this Chapter, the matter shall be submitted to the Committee established in Article 4.13 (Committee on Rules of Origin, Custom Procedures and Trade Facilitation). 9. In all cases of disputes between the importer and the customs authorities of the importing Party shall be under the law of such Party.

ARTICLE 3.32: COMMON PROCEDURES

str. 133The Committee on Rules of Origin, Custom Procedures and Trade Facilitation may draft uniform procedures, which it considers necessary to be submitted to the Joint Committee for its approval. ARTICLE 3.33: AMENDMENTS TO THE CHAPTER

str. 134The Joint Committee may decide to amend the provisions of this Chapter.

CHAPTER 1 LIVE ANIMALS

CHAPTER 2

MEAT AND EDIBLE MEAT OFFAL

str. 13402.01 - 02.10

Wholly Obtained.

CHAPTER 3 FISH AND CRUSTACEANS, MOLLUSCS AND OTHER AQUATIC INVERTEBRATES

CHAPTER 4

DAIRY PRODUCE; BIRD EGGS; NATURAL HONEY; EDIBLE PRODUCTS OF ANIMAL ORIGIN, NOT ELSEWHERE SPECIFIED OR INCLUDED

str. 134| Wholly Obtained.

CHAPTER 7

EDIBLE VEGETABLES AND CERTAIN ROOTS AND TUBERS

str. 13607.01 - 07.14

Wholly Obtained.

CHAPTER 8 EDIBLE FRUIT AND NUTS; PEEL OF CITRUS FRUIT OR MELONS

str. 13608.01 - 08.14

Wholly Obtained.

CHAPTER 9 COFFEE, TEA, MATE AND SPICES

str. 13609.01

Wholly Obtained.

CHAPTER 10 CEREALS

str. 13610.01 - 10.08

A change to heading 10.01 through 10.08 from any other chapter.

CHAPTER 11 PRODUCTS OF THE MILLING INDUSTRY; MALT; STARCHES; INULIN; WHEAT GLUTEN

str. 13611.01 - 11.08

A change to heading 11.01 through 11.08 from any other chapter.

CHAPTER 15 ANIMAL OR VEGETABLE FATS AND OILS AND THEIR CLEAVAGE PRODUCTS; PREPARED EDIBLE FATS; ANIMAL OR VEGETABLE WAXES

str. 13615.01 - 15.18

A change to heading 15.01 through 15.18 from any other chapter.

CHAPTER 16

PREPARATIONS OF MEAT, OF FISH OR OF CRUSTACEANS, MOLLUSCS OR OTHER AQUATIC INVERTEBRATES

str. 136| 16.01 - 16.02 | A change to heading 16.01 through 16.02 from any other chapter, except from heading 02.01, 02.02, 02.03, 02.07, allowing the use of mechanically deboned poultry meat of heading 02.07.