Inclusion of the Bailiwick of Jersey in the UK-India Comprehensive Economic and Trade Agreement (“UK-India CETA”)

REPORT

This Report to the States Assembly provides an overview of Jersey’s inclusion in the UK-India Comprehensive Economic and Trade Agreement (“UK-India CETA”).

It provides States Members with an overview of –

• The background to UK-India CETA application to Jersey

• The process of application of the UK-India CETA to Jersey

• An  assessment  of  the  implications,  including  risks  and  opportunities,  for application of the UK-India CETA to Jersey

Annexes

• Annex I – UK-India CETA full text

• Annex II – UK Side Letter on Territorial Extension to the Crown Dependencies

• Annex  III  –  India  Side  Letter  on  Territorial  Extension  to  the  Crown Dependencies

• Annex IV – Draft Explanatory Memorandum on the UK-India CETA

MINISTER FOR EXTERNAL RELATIONS  12th August 2026

EXECUTIVE SUMMARY

On 24 July 2025, the UK-India CETA (the “Agreement”) was signed by United Kingdom (“UK”) Secretary of State for Business and Trade, Jonathan Reynolds, and Indian Minister of Commerce and Industry, Piyush Goyal. The Agreement completed ratification and entered into force on 15 July 2026, at which point chapters relating to trade in goods were applied to Jersey.

Participation in this Agreement[1] (the “Principles”).

From the point of entry into force, Jersey businesses are able to make full use of all tariff reductions and goods-related trade easements with India, and vice versa. The Agreement also includes an option for potential future extension of the remaining chapters, which primarily concern services trade and regulatory alignment, subject to agreement by the UK and India. The Agreement also includes a provision for Jersey’s disapplication, triggered via the UK, should the Government of Jersey decide at any point and for any reason to withdraw from the Agreement.

This report is being submitted to the States Assembly to provide States Members with an overview of the Agreement’s background, the process of its application to Jersey, a summary of the provisions of the Agreement that will be applied to Jersey, and an assessment of the implications (including risks and opportunities) for the Island.

The report notes that, although current trade with India is relatively modest, Jersey’s participation in the UK-India CETA is important in ensuring the Island remains aligned with the UK and other Crown Dependencies within the Customs Union framework. Non-inclusion in the UK-India CETA (and future UK Free Trade Agreements) could over time create divergence within the UK-Crown Dependencies Customs Union. The UK-India  CETA  also  provides  a  platform  for  future  opportunities,  including  the potential for future extension of provisions relating to trade in services, which could deliver benefits to Jersey. In this context, Jersey’s inclusion in the UK-India CETA is strategically  important,  supporting  the  Island’s  long-term  economic  interests  and preserving the effective operation of the UK-Crown Dependencies Custom Union.

1. BACKGROUND TO THE UK-INDIA CETA

In 2022, then Prime Minister Boris Johnson , announced that the UK had entered into negotiations with India towards an ‘Enhanced Trade Partnership’ with the aim of working towards a full Free Trade Agreement (“FTA”).[2] As with previous agreements, the Government of Jersey informed the UK of its intent to participate in the Agreement. A full agreement, in the form of the UK-India CETA, was announced by former Prime Minister Sir Keir Starmer on 6th May 2025.

The Government of Jersey’s approach to participation in UK FTAs has been guided by the established Principles agreed to by the States Assembly under decision P.94/2021.  

The UK-India CETA completed its ratification on 15th July 2026 and entered into force on the same date. As with previous FTAs, and in accordance with the Principles, the Agreement was applied to Jersey on an initial goods-only basis, with an extension mechanism  for  potential  future  participation  in  the  remaining  chapters  of  the Agreement, namely those relating to trade in services.

2. PROCESS OF APPLICATION TO JERSEY ‘Day 1’ Participation for Good s

Following ratification and entry into force on 15 July 2026, all goods-related provisions of the Agreement were applied to Jersey. From this date, businesses in Jersey have been able to make full use of tariff reductions and goods-related trade easements with respect to India. In return, the Government of Jersey has reciprocated access to its market for Indian businesses with the same goods-related liberalisation. Furthermore, participation ensures full goods-related alignment with the UK, in order to maintain the integrity of the Customs Union between the Crown Dependencies and the UK.

The following chapters of the Agreement now apply to Jersey from ‘Day 1’:

2. Trade in Good s:

Provides for the liberalisation of trade in goods between the Jersey and India, removing tariffs, duties, and quotas in accordance with each party’s tariff schedule.

3. Rules of Origin:

Outlines the economic nationality criteria that a good or product must meet in order to benefit from the preferential treatment agreed in the deal.

5. Customs and Trade Facilitation:

Ensures that customs procedures in both parties are administered in a consistent, transparent, non-discriminatory, and simplified manner.

6. Sanitary and Phytosanitary Measures:

Outlines provisions governing product imports and exports of either plant or animal origin. These rules ensure that all products imported from India into the UK and/or Jersey will have to comply with UK and Jersey food safety and biosecurity standards.

7. Technical Barriers to Trade:

Promotes coherence and alignment on product treatment with regard to technical testing, labelling, and certification; in order to remove or reduce bureaucratic non-tariff barriers to trade in goods.

A more detailed overview of the Agreement’s provisions is available in Annex IV (“Draft Explanatory Memorandum on the UK-India CETA”), paragraphs 4.11 to 4.33.

Extension Mechanism for Remaining Chapters

Article 30.3 (“Territorial Extension”) of the Agreement allows for the UK, on behalf of Government of Jersey, to extend the remaining provisions of the Agreement (primarily relating to trade in services, regulatory alignment, and specifically excluding any parallel UK tax arrangements) to the Island. This would be subject to Jersey’s ability to comply with the remaining chapters, and agreement by both the UK and India following consultations.[3] Side letters between the governments of UK and India demonstrate that both parties have a shared understanding of this Territorial Extension mechanism.[4]

Work has already  been  completed  in parallel to ensure any  outstanding areas of compliance can be assured, should full inclusion in the Agreement be desired in the future. In the event that Jersey was to signal intent and subsequently secure full inclusion for the remaining chapters, a further report shall be presented to the States Assembly.

3. DISAPPLICATION

As a means of risk management, and in line with the Principles, as agreed to by the States Assembly (P.94/2021), the Government of Jersey has secured a disapplication mechanism within the negotiated text of the Agreement (Article 30.4). This means that Jersey has reserved the right to seek – via the UK – that the Agreement, or specified provisions of it, no longer apply to the Island for any reason, and at any stage after the date of entry into force. In the event of disapplication, the UK will provide written notice to  India  that  the  Agreement,  or  specified  parts  of  it,  no  longer  apply  to  Jersey. Disapplication would then take effect 12 months after the date of notification.[5]

 

4. ANALYSIS  OF  MARKET  EXPOSURE  AND  POTENTIAL  RISKS  / BENEFITS

1. Existing Trade

Analysis of data provided by Jersey Customs and Immigration Service (“JCIS”) found the present value of goods trade with India to be fairly marginal, with imports valued at approximately £630,000 (mainly consisting of clothing and jewellery) and exports valued at £16,500 (primarily finance-related goods including card readers) between 2018 and 2022. These figures likely do not give a full picture of total volume of trade with India, however, due to the fact that they only account for goods imported / exported directly to / from Jersey. These figures likely do not reflect the true value of trade with India, given that the majority of imports / exports are likely to transit via the UK through the UK-Crown Dependencies Customs Union, for which there is limited data. The data indicates that Jersey’s goods trading relationship with India is currently modest, offering scope for future growth and development of stronger trading links over time, under this Agreement.

2. Future Trade

The Agreement will deliver a previously unprecedented level of market access and tariff reductions to UK and Jersey businesses trading into the Indian market. Jersey firms will be able to benefit from a phased tariff reductions across 90% of goods tariff lines, delivered over 10 years. From ‘day 1’, 64% of tariff lines (covering £1.9 billion of existing UK exports to India) will be eligible for completely tariff-free import to India, rising to 85% by the end of the 10-year period, whilst remaining tariffs will be significantly reduced. These changes will cut the immediate costs of export, ensuring that any Jersey businesses wishing to sell goods into the Indian market are able to do so at a significantly more competitive rate.6

Additionally, the Agreement includes a range of provisions aimed at reducing non-tariff barriers (“NTBs”) and promoting customs alignment between India and the UK, with the aim of reducing barriers to trade for businesses.

In return, the UK will also eliminate tariffs on 99% of goods imported from India. These changes to external tariffs will also be applied by Jersey in order to ensure complete alignment of goods treatment within the UK-Crown Dependencies Customs Union. Due to the low volumes of goods currently imported from India, this is not expected to present  any  additional  burdens  on  our  customs  systems,  nor  significant  financial implications from a loss of duty income.

These changes are significant as India remains a relatively regulated market compared with many other major economies, and businesses entering the market may encounter a combination  of  import  tariffs,  NTBs,  and  sector-specific  regulatory  requirements. According to World Trade Organisation (“WTO”) data, India has one the highest average applied tariff rates among G20 economies (with some products facing duties above 100%).7 Despite this, India is a potential opportunity for Jersey businesses, with

6 UK-India Trade Deal Explainer - British Chambers of Commerce 7 WTO Tariff & Trade Data | India - Member profile

a market of 1.47 billion consumers and high economic growth (expected to remain above 6% over the next five years) underpinned by a rapidly growing middle class with an ever-accelerating demand for high-quality consumer goods and services which are not available domestically. Jersey’s inclusion in the UK-India CETA will ensure that businesses looking to export into the Indian market will be able to do so at a far more competitive rate than businesses from countries who do not have such agreements with India.

3. Potential for Future Services Extension

The Agreement includes a mechanism that would allow Jersey to seek the future extension of additional chapters, including chapters relating to trade in services. This would likely be subject to a compliance review to ensure that Jersey is able to adhere to these provisions of the agreement. Following this, the UK would enter into discussions with India on behalf of the Government of Jersey “with a view to considering the extension of the provisions of the Agreement relating to trade in services… as soon as practicable”.[6]

For Jersey, the principal interest in any future extension relates to enhanced market access  opportunities  for  its  financial  services  sector.  The  ‘Time  to  Win’  Report identified India as a key growth market for Jersey’s financial and professional services sector, noting the strong and increasing demand for banking and private wealth services amongst high-net-worth Indian clients.

4. Agriculture

The UK-India CETA also includes provisions on agriculture that will apply to Jersey, particularly with respect to subsidies, import quotas, production support, protected geographical indication (“GI”), sanitary and phytosanitary (“SPS”) measures relating to food hygiene standards, and import controls. After assessment and engagement with the UK, the Government of Jersey has determined that there will be no changes necessary to Jersey’s regime in any of these areas.

The Government of Jersey has focused its UK-India CETA impact assessment on analysis of the risks of further liberalisation, particularly with respect to potential market flooding or dumping of agri-food products, whereby Indian businesses potentially drive products  into  the  Jersey  market  at  high  volume,  thereby  undermining  domestic producers. Examination of available import and export data trends for Jersey, the UK, and India suggests that imports of agrifood products from India are so low as to make the immediate risk of market flooding negligible. However, this possibility will continue to  be  monitored  following  application,  with  appropriate  safeguards  taken  if  that assessment were to change.

Additionally, to address any concerns about admitting poorer quality food or drink products into Jersey through this Agreement, assurances have been granted by the UK Food Standards Agency – the primary controlling agent of agri-food imports into the UK Crown Dependencies Customs Union – that existing controls will stop any potential

products which could be harmful, such as those containing high levels of pesticides banned in the UK or growth hormones posing a known public health risk.

5. Temporary Movement of Businesspersons

The UK-India CETA also contains new provisions to facilitate the entry and temporary stay of skilled workers in both the UK and India. These commitments include new and streamlined visa processes, with specific caps, to enable companies to move their employees between jurisdictions more freely and to foster increased exchange  of younger professional talent in key sectors like tech, finance, and other services.

The visa and work permit changes are currently only applied to the UK, with Crown Dependencies out of scope. While there is some potential for Indian employees of major multinational  companies  to  move  from  India  to  the  UK  under  this  scheme  and subsequently request an intra-company transfer to a Jersey branch of the company, this would have no bearing on the application process or need to grant permission in Jersey itself.

Should the Government of Jersey seek full inclusion of the UK-India CETA in future, there is no current expectation that Jersey would need to take on any additional commitments regarding immigration as this chapter only pertains to set UK immigration processes.

6. Investment

The UK-India CETA does not include a dedicated investment chapter. As part of the Agreement, however, a Bilateral Investment Treaty (“BIT”) is currently in negotiation between the  UK and  India  which  would eventually sit alongside the  Agreement, providing assurances to investors from either party that their investments will not be subject to arbitrary treatment (e.g. nationalisation of a covered investment without a legitimate public policy objective).

The BIT remains under negotiation, and it has not yet been determined whether Jersey will be included within its territorial scope. The Government of Jersey will continue to engage closely with the UK Government throughout the negotiation process, with the objective of securing Jersey's inclusion should a BIT ultimately be concluded.

7. UK-India Tax Arrangements

As part of the Agreement, the UK and India have also negotiated a Double Contributions Convention  (“DCC”)  that  will  sit  alongside  the  UK-India  CETA  to  simplify  tax treatment of temporary workers. This ensures that employees working temporarily in either party will only be required to pay social security contributions in their home country, for a period of up to 36 months.9

The specific territorial scope of the DCC will only cover the UK and there is no extension mechanism for Crown Dependencies given Jersey, Guernsey, and the Isle of Man have their own unique and incompatible social security systems. As such, Indian

9 UK Side Letter Agreeing to Negotiate a Double Contributions Convention

workers employed temporarily in Jersey, such as through an intra-company transfer, will still be required to pay full tax and social security contributions in Jersey, and vice versa.

viii.  Potential Risks of Non-Inclusion

Although existing levels of trade with India are modest, Jersey’s participation in the Agreement (and future UK FTAs) remains important in order to ensure coherence within the UK-Crown Dependencies Customs Union, through which the majority of goods imported into Jersey transit.

Non-inclusion in the Agreement would result in differing tariff rates applying to goods entering Jersey from India, which would not be practicable given that goods transiting within the Customs Union do so freely.  Additionally, as the Agreement contains provisions on customs cooperation and best practice that are designed to evolve over time, non-inclusion would likely result in Jersey’s customs practices falling out of line with the UK’s over time, which would ultimately have a detrimental impact on local traders over the long run.

5. CONCLUSION AND NEXT STEPS

The UK-India CETA entered into force on 15 July 2026, from which point Jersey exporters are able make use of the preferential terms within the Agreement for goods- related trade.

As the compliance obligations arising from this Agreement are expected to be limited, participation is not anticipated to result in any significant costs for the Government of Jersey.

The Government of Jersey, through the Ministry for External Relations, will work to raise awareness of the opportunity that the UK-India CETA presents to Jersey, assess interest from firms on island, and facilitate support where that interest exists.

The Ministry for External Relations continues to engage with DBT on how best to present these opportunities to interested firms and will continue to analyse the economic potential of the services offering of the Agreement, so as best to inform Ministers and States Assembly should a decision be made to pursue full inclusion in the future.

COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT
BRITAIN AND NORTHERN IRELAND AND THE GOVERNMENT OF THE REPUBLIC OF INDIA

TABLE OF CONTENTS

Preamble

Chapter 1  Initial Provisions and General Definitions

Chapter 2  Trade in Good s

Annex 2A (Schedules of Tariff Commitments for Good s)

Appendix 2A-a (Schedule of Tariff Commitments of India)

Appendix 2A-b (Schedule of Tariff Commitments of the United Kingdom)

Chapter 3  Rules of Origin

Annex 3A (Product Specific Rules of Origin) Annex 3B (Origin Declaration Template) Annex 3C (Certificate of Origin Template)

Annex 3D (Framework for the Authentication Process of Origin Declarations)

Annex  3E  (Data  Protection  and  Processing  of  Personal Information)

Chapter 4  Trade Remedies

Chapter 5  Customs and Trade Facilitation

Chapter 6  Sanitary and Phytosanitary Measures

Chapter 7  Technical Barriers to Trade

Annex 7A (Product Sectors)

Chapter 8  Trade in Services

Annex 8A (Professional Services)

Annex 8B (Schedules of Specific Commitments)

Schedule of India

Schedule of the United Kingdom

Annex  8C  (Most-Favoured-Nation  Treatment  Sectoral Coverage)

Schedule of India

Schedule of the United Kingdom

Chapter 9  Financial Services

Annex 9A (Schedules of Specific Commitments on Financial Services)

Schedule of India

Schedule of the United Kingdom Chapter 10  Temporary Movement of Natural Persons

Annex  10A  (Schedules  of  Specific  Commitments  on Temporary Movement of Natural Persons)

Schedule of India

Schedule of the United Kingdom

Chapter 11  Telecommunications Chapter 12  Digital Trade

Chapter 13  Intellectual Property Rights

Annex 13A (Geographical Indication Specification)

Annex 13B (Protected Geographical Indications for Wines, Spirits, Agricultural Products, and Foodstuffs)

Annex 13C (Geographical Indications for Good s Other than Wines,  Spirits,  Agricultural  Products,  and  Foodstuffs Protected in India as Good s of Handicrafts, Natural Good s and Manufactured Good s)

Chapter 14  Innovation

Chapter 15  Government Procurement

Annex 15A (Government Procurement Schedules)

Schedule of India

Schedule of the United Kingdom

Chapter 16  Competition and Consumer Protection Policy

Chapter 17  State-Owned Enterprises

Chapter 18  Subsidies

Chapter 19  Small and Medium-Sized Enterprises Chapter 20  Labour

Chapter 21  Environment

Chapter 22  Trade and Development Cooperation Chapter 23  Trade and Gender Equality

Chapter 24   Good Regulatory Practice

Chapter 25  Transparency

Chapter 26  Anti-Corruption

Chapter 27  Administrative and Institutional Provisions Chapter 28  General Provisions and Exceptions Chapter 29  Dispute Settlement

Annex 29A (Rules of Procedure)

Appendix  29A-a  (Indicative  Timetable  for  Panel Proceedings)

Appendix 29A-b (Confidential Information)

Appendix 29A-c (Declaration of Non-Disclosure) Annex 29B (Code of Conduct)

Appendix 29B-a (Initial Disclosure Statement) Chapter 30  Final Provisions

PREAMBLE

The Government of the United Kingdom of Great Britain and Northern Ireland (“the United Kingdom”) and the Government of the Republic of India (“India”), hereinafter referred to individually as a “Party” or jointly as “the Parties”,

REINFORCING  the  longstanding  bonds  of  friendship,  cooperation  and people-to-people linkages between them;

BUILDING on their longstanding and strong partnership based on common principles and values, and their important economic and trade relationship;

SEEKING to establish a clear, transparent, and predictable legal framework that supports further expansion of trade, to enhance the competitiveness of their economies, and to eliminate, and avoid the creation of, barriers between them;

ACKNOWLEDGING the important role and contribution of business in expanding trade between the Parties and the need to further promote and facilitate  cooperation  and  utilisation  of  the  greater  business  opportunities provided by this Agreement;

EMPHASISING the need to support the growth and development of small and medium-sized enterprises by enhancing their ability to participate in and benefit from the opportunities created by this Agreement;

RECOGNISING the importance of ensuring certainty and reducing barriers for service suppliers of the Parties by agreeing to commitments which will expand trade in services and facilitate temporary movement of natural persons between the Parties;

RECOGNISING  the  interaction  between  trade  and  innovation,  and  the contribution of both to economic growth, and seeking to expand and deepen their bilateral cooperation in this area;

NOTING the importance of facilitating new opportunities for businesses and consumers through digital trade;

AIMING to enhance participation in mutual recognition frameworks between the Parties or their authorities;

AFFIRMING the importance of development and inclusive economic growth, including in increasing the ability of forest dwellers in India, local communities and socially and educationally disadvantaged groups to access and fully benefit from the opportunities created by this Agreement, taking into account the context, challenges, and capabilities of each Party;

SEEKING to increase women’s access to and ability to fully benefit from the opportunities created by this Agreement, including with respect to women from rural  areas,  marginalised  communities,  and  economically  vulnerable backgrounds;

RESOLVING to promote transparency, good governance, and the rule of law; RECOGNISING their right to regulate and to preserve the flexibility of the Parties to set legislative and regulatory priorities, in particular, the need to protect national security and legitimate public welfare objectives such as health (including public health), labour rights, safety, food security, environmental protection (including climate change) and conservation of exhaustible natural resources, integrity and stability of the financial system, and public morals, in accordance with the rights and obligations provided in this Agreement;

BUILDING  on  their  respective  rights  and  obligations  under  the  WTO Agreement and other international agreements relating to matters covered by this Agreement to which both Parties are party;

ACKNOWLEDGING the need for a mutually beneficial trade agreement that encourages trade flows to the economic benefit of both the Parties;

AIMING to improve the efficiency and competitiveness of their economies and to expand trade between the Parties;

HAVE AGREED as follows:

CHAPTER 1

INITIAL PROVISIONS AND GENERAL DEFINITIONS

Article 1.1
Establishment of a Free Trade Area

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

Article 1.2

Relation to Other International Agreements

1. The Parties affirm their existing rights and obligations with respect to each other under  existing  international  agreements  to  which  both  Parties  are  party, including the WTO Agreement. For greater certainty, an affirmation of rights or obligations under another international agreement, or of commitments to implement another international agreement or a provision thereof, does not in itself lead to incorporation of those rights, obligations or commitments into this Agreement.
2. If a Party considers that a provision of this Agreement is inconsistent with a provision of another international agreement to which both Parties are party, the Parties shall, on request, consult with a view to reaching a mutually satisfactory solution.[7]
3. If any international agreement, or a provision therein, that has been referred to in this Agreement or incorporated into this Agreement is amended after entry into force of this Agreement, the Parties shall, at the request of either Party, consult on whether to amend this Agreement.
4. For as long as the Windsor Framework[8] is in force,[9] nothing in this Agreement shall preclude the United Kingdom from adopting or maintaining measures, or refraining from doing so, further to the Windsor Framework, and amendments thereto and subsequent agreements replacing parts thereof, provided that such measures, or the absence of such measures, are not used as a means of arbitrary

or unjustified discrimination against the other Party or as a disguised restriction on trade.

5. On request of either Party, the Parties shall hold consultations, in relation to the effects of a measure described in paragraph 4 the United Kingdom has adopted, or absence thereof,[10] on this Agreement and seek a mutually acceptable solution.[11]

Article 1.3

Laws and Regulations and their Amendments

Where reference is made in this Agreement to laws or regulations of a Party, those laws or regulations shall be understood to include amendments thereto and successor laws or regulations, unless otherwise provided in this Agreement.

Article 1.4
General Definitions

For the purposes of this Agreement, unless otherwise provided in this Agreement:

“Agreement” means the Comprehensive Economic and Trade Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of India;

“Agreement on Safeguards” means the Agreement on Safeguards, set out in Annex 1A to the WTO Agreement;

“Anti-Dumping Agreement” means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, set out in Annex 1A to the WTO Agreement;

“central level of government” means:

1. for India, the Government of the Union of India; and
2. for the United Kingdom, His Majesty’s Government of the United Kingdom of Great Britain and Northern Ireland;

“customs authority” means:

1. for India,  the Central Board of Indirect  Taxes and Customs or its successor; and
2. for the United Kingdom, His Majesty’s Revenue and Customs or its successor and any other authority responsible for customs matters within its territory. For greater certainty, with respect to the provisions of this Agreement which apply to the Bailiwick of Guernsey, the Bailiwick of Jersey or the Isle of Man, “customs authority” shall also mean:

1. with respect to the Bailiwick of Jersey, the Jersey Customs & Immigration Service or its successor;
2. with respect to the Bailiwick of Guernsey, Guernsey Customs & Excise or its successor; and
3. with respect to the Isle of Man, the Customs and Excise Division, Isle of Man Treasury or its successor;

“customs duty” includes any duty or charge of equivalent effect imposed on or in connection with the importation of goods, including any form of cess, surtax or surcharge in connection with such importation, but does not include:

1. a charge equivalent to an internal tax imposed consistently with Article III:2 of GATT 1994;
2. a measure applied in accordance with the provisions of Articles VI or XIX  of  GATT  1994,  the  Anti-Dumping  Agreement,  the  SCM Agreement or the Agreement on Safeguards, or a measure imposed in accordance with Article 22 of the Dispute Settlement Understanding by the WTO Dispute Settlement Body; or
3. a fee or other charge in connection with importation commensurate with the cost of services rendered in conformity with Article VIII of GATT 1994;

“Customs Valuation Agreement” means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, set out in Annex 1A to the WTO Agreement;

“days” means calendar days, including weekends and holidays;

“Dispute  Settlement  Understanding”  means  the  Understanding  on  Rules  and Procedures Governing the Settlement of Disputes, set out in Annex 2 to the WTO Agreement;

“existing” means in effect on the date of entry into force of this Agreement;

“GATS” means the General Agreement on Trade in Services, set out in Annex 1B to the WTO Agreement;

“GATT 1994” means the General Agreement on Tariffs and Trade 1994, set out in Annex 1A to the WTO Agreement. For greater certainty, references in this Agreement to articles in GATT 1994 include the interpretative notes;

“good” means any merchandise, product, article, or material;

“goods of a Party” means domestic products as these are understood under GATT 1994 or such goods as the Parties may decide, and includes originating goods; “government procurement” means the process by which a government obtains the use of or acquires goods or services, or any combination thereof, for governmental purposes and not with a view to commercial sale or resale or use in the production or supply of goods or services for commercial sale or resale;

“Harmonized System” or “HS” means the Harmonized Commodity Description and Coding System defined in the International Convention on the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, and legal notes, as adopted and implemented by the Parties in their respective laws;

“Joint Committee” means the Joint Committee established pursuant to Article 27.1 (Establishment of the Joint Committee – Administrative and Institutional Provisions);

“juridical person” means any entity duly constituted or otherwise organised under applicable  law,  whether  for  profit  or  otherwise,  and  whether  privately-owned  or government-owned, including any corporation, trust, partnership, joint venture, sole proprietorship, or association;

“measure” means any measure by a Party, whether in the form of law, regulation, rule, procedure, decision, administrative action or any other form;

“national” means:

1. for India, natural persons having citizenship in India in accordance with its laws and regulations;
2. for  the  United  Kingdom,  a  British  citizen  in  accordance  with  its applicable laws and regulations, or a permanent resident;

“originating” means qualifying as originating under the rules of origin in Chapter 3 (Rules of Origin);

“person” means a natural person or a juridical person;

“person of a Party” means a national or a juridical person of a Party;

“regional level of government” means:

1. for India, the state and the Union Territories of India;
2. for the United Kingdom:

1. England, Northern Ireland,Scotlandor Wales; or
2. His Majesty’s Government of the United Kingdom of Great Britain and Northern Ireland in respect of England, Northern Ireland, Scotland or Wales but not the United Kingdom as a whole;

“SCM Agreement” means the Agreement on Subsidies and Countervailing Measures, set out in Annex 1A to the WTO Agreement;

“SME” means a small or medium-sized enterprise, including a micro-sized enterprise, and may be further defined, where applicable, according to laws, regulations or national policies of each Party;

“SPS  Agreement”  means  the  Agreement  on  the  Application  of  Sanitary  and Phytosanitary Measures, set out in Annex 1A to the WTO Agreement;

“Subcommittee  on  Trade  in   Good s”  or  “ Good s  Subcommittee”  means  the Subcommittee on Trade in Good s established pursuant to Article 2.17 (Subcommittee on Trade in Good s – Trade in Good s);

“Subcommittee on Trade in Services” means the Subcommittee on Trade in Services established pursuant to Article 8.19 (Subcommittee on Trade in Services – Trade in Services);

“Subcommittee on Sustainability” or “Sustainability Subcommittee” means the Subcommittee on Sustainability established pursuant to Article 27.7 (Subcommittee on Sustainability – Administrative and Institutional Provisions);

“TBT Agreement” means the Agreement on Technical Barriers to Trade, set out in Annex 1A to the WTO Agreement;

“territory” means:

1. for India, the territory of the Republic of India, including its territorial sea, and the airspace above it; and other maritime zones including the Exclusive  Economic  Zone  and  continental  shelf  over  which  the Republic  of  India  has  sovereignty,  sovereign  rights,  or  exclusive jurisdiction, in accordance with both its laws and regulations in force and international law, including the United Nations Convention on the Law of the Sea, 1982;
2. for the United Kingdom:

1. the territory of the United Kingdom, including its territorial sea, and the airspace above it;
2. all the areas beyond the territorial sea of the United Kingdom, including the sea-bed and subsoil of those areas, over which the United Kingdom may exercise sovereign rights or jurisdiction in accordance with international law;
3. the Bailiwicks of Guernsey and Jersey and the Isle of Man (including their airspace and the territorial sea adjacent to them), territories for whose international relations the United Kingdom is responsible, as regards:

1. Chapter 2 (Trade in Good s);
2. Chapter 3 (Rules of Origin);
3. Chapter 5 (Customs and Trade Facilitation), except for Article 5.9 (Authorised Economic Operator - Customs

and Trade Facilitation) in respect of the Bailiwicks of Guernsey and Jersey, and Article 5.13 (Single Window - Customs and Trade Facilitation) in respect of the Isle of Man;

4. Chapter 6 (Sanitary and Phytosanitary Measures); and
5. Chapter 7 (Technical Barriers to Trade); and

4. any  territory  for  whose  international  relations  the  United Kingdom is responsible and to which this Agreement is extended in accordance with Article 30.3 (Territorial Extension – Final Provisions);

“Trade Facilitation Agreement” means the Agreement on Trade Facilitation, set out in Annex 1A to the WTO Agreement;

“TRIPS Agreement” means the Agreement on Trade-Related Aspects of Intellectual Property Rights, set out in Annex 1C to the WTO Agreement, as amended from time to time by an amendment made under Article X of the WTO Agreement that has taken effect  for  the  Parties,  and  as  read  together  with  any  decision  of  the  Ministerial Conference of the WTO under paragraph 3 of Article IX of the WTO Agreement (whether made before or after the entry into force of this Agreement);

“WTO” means the World Trade Organization; and

“WTO Agreement” means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994.

CHAPTER 2
TRADE IN GOODS

Article 2.1 Definitions

For the purposes of this Chapter:

“consular transactions” means the procedure of obtaining from a consul of the importing Party in the territory of the exporting Party, or in the territory of a third party, a consular invoice or a consular visa for a commercial invoice, certificate of origin, manifest,  shippers’  export  declaration  or  any  other  customs  documentation  in connection with the importation of the good;

“Import   Li censing  Agreement”  means  the  Agreement  on  Import   Li censing Procedures, set out in Annex 1A to the WTO Agreement;

“import  licensing  procedure”  means  an  administrative  procedure  requiring  the submission of an application or other documentation (other than that generally required for customs purposes) to the relevant administrative body or bodies as a prior condition for importation into the territory of the importing Party;

“originating good” has the meaning given in Chapter 3 (Rules of Origin); and

“repair” means any processing operation undertaken on a good with the aim of remedying operating defects or material damage and substantially re-establishing the good to its original function or of ensuring compliance with technical requirements for its use, without which the good could no longer be used in the normal way for the purposes for which it was intended, and repair of goods includes restoration and maintenance.

Article 2.2 Objective

The objective of this Chapter is to facilitate trade in goods between the Parties and to progressively liberalise  trade in goods in accordance with the provisions of this Agreement and in conformity with Article XXIV of GATT 1994.

Article 2.3 Scope

This Chapter shall apply to trade in goods between the Parties, unless otherwise provided for in this Agreement.

 

Article 2.4
National Treatment

1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994. To this end, Article III of GATT 1994 is incorporated into and made part of this Agreement, mutatis mutandis.
2. Paragraph 1 means, with respect to a regional or state level of government, as the case may be, treatment no less favourable than that accorded by that regional  or  state  level  government,  as  the  case  may  be,  to  like,  directly competitive or substitutable goods of the Party of which it forms part.

Article 2.5

Classification of Good s and Transposition of Schedules

1. For the purposes of this Agreement, the classification of goods in trade between the Parties shall be governed by each Party’s respective tariff nomenclature in conformity with the Harmonized System and its legal notes and amendments.
2. Each  Party  shall  ensure  that  the  transposition  of  its  Schedule  of  Tariff Commitments, undertaken in order to implement Annex 2A (Schedules of Tariff Commitments for Good s) in the nomenclature of the revised HS Code following  periodic  amendments  to  the  HS  Code,  is  carried  out  without impairing or diminishing the tariff commitments set out in its Schedule of Tariff Commitments in Annex 2A (Schedules of Tariff Commitments for Good s).

Article 2.6
Treatment of Customs Duties

1. Unless otherwise provided in this Agreement, each Party shall reduce or eliminate customs duties on originating goods of the other Party in accordance with the tariff commitments set out in its Schedule of Tariff Commitments in Annex 2A (Schedules of Tariff Commitments for Good s).
2. For each good, the base rate of customs duty to which successive reductions under paragraph 1 are to be applied shall be specified in the Party’s Schedule of Tariff Commitments in Annex 2A (Schedules of Tariff Commitments for Good s).
3. Where and for so long as a Party’s applied most-favoured-nation customs duty is lower than the rate calculated pursuant to paragraph 1 or 2, an importer may claim the lower most-favoured-nation customs duty and the Party shall apply the lower rate to the originating goods of the other Party.
4. A Party may at any time unilaterally accelerate the elimination or reduction of customs duties set out in its Schedule of Tariff Commitments in Annex 2A (Schedules of Tariff Commitments for Good s).

5. For greater certainty, a Party may raise a customs duty to the level for a specific year as set out in its Schedule of Tariff Commitments in Annex 2A (Schedules of Tariff Commitments for Good s) following a unilateral reduction as set out in paragraph 4.
6. On the request of a Party, the Parties may consult to consider accelerating or broadening the scope of the elimination or reduction of customs duties set out in their respective Schedules of Tariff Commitments in Annex 2A (Schedules of Tariff Commitments for Good s).

Article 2.7
Modification of Concessions

1. A Party to this Agreement may request the other Party to enter into discussions for the purpose of modifying or withdrawing a concession contained in its Schedule  of  Tariff  Commitments  in  Annex  2A  (Schedules  of  Tariff Commitments for Good s). Any such modification or withdrawal of concession can be effected only with the agreement of both Parties.
2. A mutually agreed outcome shall be reflected in the relevant amended Schedule of Tariff Commitments in Annex 2A (Schedules of Tariff Commitments for Good s).
3. A Party shall not modify or withdraw a concession without the prior agreement of the other Party.

Article 2.8
Administrative Fees and Formalities

1. Each Party shall ensure, in accordance with Article VIII:1 of GATT 1994 and its interpretative notes, that all fees and other charges of whatever character (other than import duties and export duties, charges equivalent to an internal tax or other internal charges applied consistently with Article III:2 of GATT 1994, and anti-dumping and countervailing duties, safeguards and measures applied in accordance with Article 22 of the Dispute Settlement Understanding) imposed by that Party on, or in connection with, the importation or exportation of goods of a Party, are limited to the amount of the approximate cost of services rendered and shall not represent an indirect protection to domestic goods or a taxation of imports or of exports for fiscal purposes.
2. Each Party shall promptly publish on the internet all fees and charges it imposes in  connection  with  importation  or  exportation,  including  any  updates  or changes to such fees and charges. Fees and charges shall not be applied until information on them, including the responsible authority and when and how payment is to be made, has been published, to the extent possible in the English language.
3. No Party shall require consular transactions, including related fees and other charges, in connection with the importation of any good of the other Party.

Article 2.9
Temporary Admission

1. Each Party shall allow, as provided for in its laws and regulations, goods regardless of their origin, including their means of transport, to be brought into its territory conditionally relieved from payment of import duties and taxes, if such goods:

1. are intended for re-exportation within a specific period without having undergone any change except normal depreciation and wastage due to the use made of them; and
2. are brought into its territory for one of the following purposes:

1. goods intended for display or use at playgrounds, theatres, exhibitions, fairs or other similar events;
2. professional  equipment,  necessary  to  carry  out  a  trade  or profession, which qualifies for temporary entry pursuant to the laws or regulations of the Party;
3. goods imported in connection to a commercial operation but whose importation itself does not constitute that commercial operation,  including  samples,  advertising  films,  recordings, goods used to carry out tests and goods subject to tests;
4. containers packing or packaging and pallets all of which are durable, reusable and that are in use or to be used in the shipment of goods in international traffic;
5. goods  imported  exclusively  for  educational  or  scientific purposes or cultural activities and events;
6. goods imported for sports purposes; or
7. animals  imported  for  participation  in  shows,  exhibitions, contests, competitions, demonstrations, entertainment, exercise of public functions (such as police dogs, sniffer dogs) or guide dogs.

2. Each Party shall allow, as provided for in its laws and regulations, goods imported in connection with a manufacturing operation or process, including specific  tools,  models  and  plans,  brought  into  its  custom  territory  for subsequent re-exportation, conditionally relieved, totally or partially, from payment of import duties and taxes, or eligible for duty drawback.
3. Each Party shall, as provided for in its laws and regulations, on the request of the person concerned and for reasons its customs authority considers valid, extend the time limit for duty-free temporary admission beyond the period initially fixed.

4. A Party may impose a condition for the duty-free temporary admission of goods referred to in paragraph 1, among others, on goods that:

1. are intended for re-exportation without having undergone any change except normal depreciation including wastage due to the use made of them and be capable of identification when exported;
2. are  used  solely  by  or  under  the  personal  supervision  of  a  person established or resident in the other Party in the exercise of the business activity, trade, profession or sport of that person of the other Party;
3. are not sold or leased while in its territory; except on payment of applicable duties and interests on such release;
4. are accompanied by a security, if requested by the importing Party, in an amount no greater than the customs duty or charges that would otherwise  be  owed  on  entry  or  final  importation,  releasable  on exportation of the goods;
5. are exported on or before the departure of the person carrying out the relevant trade or profession referenced in sub-subparagraph 1(b)(ii), or within such period of time reasonably related to the purpose of the temporary admission as the Party may establish, or within the maximum timeframe set by a Party for temporary admission of a good, unless extended;
6. are admitted in no greater quantity than is reasonable for their intended use; and
7. are otherwise admissible into the Party’s territory under its laws.

5. If any condition that a Party imposes under paragraph 4 has not been fulfilled, the Party may apply the import duties and taxes and any other charge that would normally be owed on the good in addition to any other charges, penalties or actions provided for under its law.

Article 2.10
Customs Valuation

For the purpose of determining the customs value of goods traded between the Parties, the Parties reaffirm their commitment to Part I of the Customs Valuation Agreement.

Article 2.11

Import and Export Restrictions

Unless otherwise provided in this Agreement, no Party shall 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 GATT 1994. To this end, Article XI of GATT 1994 is incorporated into and made part of this Agreement, mutatis mutandis.

Article 2.12 Import Li censing

1. A Party shall only adopt or maintain import licensing procedures which are consistent with the Import Li censing Agreement and to that end Articles 1 through 3 of the Import Li censing Agreement are incorporated into and made part of this Agreement, mutatis mutandis.
2. A Party shall publish on an official government website any new or modified import licensing procedure, including any information that it is required to publish under Article 1.4(a) of the Import Li censing Agreement. To the extent practicable, the Party shall do so at least 21 days before the new procedure or modification takes effect.
3. A Party shall be deemed to be in compliance with paragraph 2 with respect to a new or modified import licensing procedure if it notifies that procedure including the information specified in Article 5(2) of the Import Li censing Agreement to the WTO Committee on Import Li censing provided for in Article 4 of the Import Li censing Agreement.
4. At the request of a Party, the other Party shall provide the information specified in Article 5(2) of the Import Li censing Agreement, with regard to any import licensing procedures that it adopts or maintains, or changes to existing licensing procedures.

Article 2.13
Agricultural Safeguards

Originating agricultural goods from a Party shall not be subject to any duties applied by a Party pursuant to a special safeguard taken under the Agreement on Agriculture, set out in Annex 1A to the WTO Agreement.

Article 2.14

Good s Re-entered after Repair or Alteration

1. A Party shall not apply a customs duty to a good, regardless of its origin, that re-enters the Party’s territory after that good has been temporarily exported from its territory to the territory of the other Party for repair or alteration, except that a customs duty may be applied to the value-added resulting from the repair or alteration (including cost of material used in repairs, insurance and freight charges both ways) that was performed in the territory of the other Party.
2. Paragraph 1 does not apply to:

1. a good that has not entered into free circulation in a Party prior to being exported for repair or alteration;[12] or
2. any materials used in the repair or alteration which were not in free circulation in the Party where the repair or alteration occurred, unless a payment equivalent to the applicable duty for that material to enter into free circulation has subsequently been made.

3. Neither Party shall, as provided for in its laws and regulations, apply customs duties to a good, regardless of its origin, admitted temporarily from the customs territory of the other Party for repair or alteration.
4. For the purposes of this Article, “repair or alteration” does not include an operation or process that:

1. destroys  a  good’s  essential  characteristics  or  creates  a  new  or commercially different good;
2. transforms an unfinished good into a finished good; or
3. substantially changes the technical performance or function of a good.

Article 2.15
Non-Tariff Measures

1. No Party shall adopt or maintain any non-tariff measure on the importation of any good of the other Party or on the exportation of any good destined for the territory of the other Party, except in accordance with its WTO rights and obligations or in accordance with this Agreement.
2. Each Party shall ensure the transparency of its non-tariff measures permitted in paragraph 1 of this Article.

Article 2.16

Data Sharing on Preference Utilisation

1. For  the  purpose  of  monitoring  the  functioning  of  this  Agreement  and calculating preference utilisation rates, the Parties shall annually exchange import statistics starting one year after the date of entry into force of this Agreement.
2. The exchange of import statistics shall cover data pertaining to the most recent year available, including value and, where applicable, volume, at the tariff line level for imports of goods of the other Party benefitting from preferential duty treatment  under  this  Agreement  and  those  that  received  non-preferential treatment.

Article 2.17
Subcommittee on Trade in Good s

1. The Parties hereby establish a Subcommittee on Trade in Good s (“ Good s Subcommittee”),  comprising  representatives  of  each  Party.  The   Good s Subcommittee shall act by mutual agreement.
2. The Good s Subcommittee shall meet at the request of either Party to consider any matter arising under this Chapter at such times and venues or by such means as agreed on by the representatives of the Parties. The Good s Subcommittee shall meet at least every two years or more frequently as the Parties agree. The meetings of the Good s Subcommittee shall be chaired jointly by the Parties.
3. The Good s Subcommittee’s functions shall include:

1. promoting  trade  in  goods  between  the  Parties,  including  through consultation  on  accelerating  customs  duty  elimination  under  this Agreement and other issues as appropriate;
2. reviewing  and  monitoring  the  implementation  of  this  Chapter  and Chapter 3 (Rules of Origin). Working groups under this Chapter shall report to the Good s Subcommittee;
3. to the extent possible, promptly seeking to address tariff and non-tariff barriers to trade in goods between the Parties;
4. reviewing the future amendments to and updating of the Harmonized System to ensure that the obligations of the Parties are not altered;
5. addressing issues relating to the administration and operation of tariff rate quotas;
6. where  appropriate,  referring  matters  considered  by  the   Good s Subcommittee to the Joint Committee; and
7. undertaking any other work that the Joint Committee assigns to it.

CHAPTER 3
RULES OF ORIGIN

Section A Rules of Origin

Article 3.1 Definitions

For the purposes of this Chapter:

“aquaculture” means the farming of aquatic organisms, including fish, molluscs, crustaceans, other aquatic invertebrates and aquatic plants, from seed stock, including seed stock imported from non-Parties, such as eggs, fry, fingerlings, larvae, parr, smolts or other immature fish at a post-larval stage, by intervention in the rearing or growth processes to enhance production such as regular stocking, feeding, or protection from predators;

“carrier” means any vehicle for air, sea or land transport. However, the carriage of product can be made through multimodal transport;

“competent authority” means:

1. for  India,  in  the  case  of  exports  from  India,  the  Department  of Commerce or agencies notified to issue the certificate of origin; and in the case of imports into India, the Central Board of Indirect Taxes and Customs (“CBIC”) or any of its successors; and
2. for the United Kingdom, its customs authority as defined in Article 1.4 (General Definitions - Initial Provisions and General Definitions);

“exporter”  means  a  person,  located  in  a  Party,  who,  in  accordance  with  the requirements laid down in the laws and regulations of that Party, exports a good;

“fungible  goods”  or  “fungible  materials”  means  goods  or  materials  that  are interchangeable for commercial purposes and the properties of which are essentially identical;

“generally accepted accounting principles” means those principles recognised by consensus or with substantial authoritative support in the territory of a Party with respect  to  the  recording  of  revenues,  expenses,  costs,  assets  and  liabilities;  the disclosure of information; and the preparation of financial statements. These principles may encompass broad guidelines for general application, as well as detailed standards, practices, and procedures;

“indirect material” means a material used in the production, testing or inspection of a good but not physically  incorporated  into  the  good or a material used in  the maintenance of buildings or the operation of equipment, associated with the production of a good, including:

1. fuel, energy, catalysts and solvents;
2. equipment, devices and supplies used to test or inspect the good;
3. gloves, glasses, footwear, clothing, safety equipment and supplies;
4. tools, dies and moulds;
5. spare  parts  and  materials  used  in  the  maintenance  of  equipment buildings;
6. lubricants, greases, compounding materials and other materials used in production or used to operate equipment buildings; and
7. any other material that is not incorporated into the good but the use of which in the production of the good can reasonably be demonstrated to be a part of that production;

“issuing  authority”  means  the  authorities  in  India  designated  for  issuance  of certificates of origin;

“material” means any good (including ingredients, raw inputs, components or parts) used in the production of another good and physically incorporated into it;

“net weight” means the weight of the material or good excluding the weight of any packaging;

“non-originating good” or “non-originating material” means a good or material that does not qualify as originating, including those of unprovable origin, in accordance with this Chapter;

“originating good” or “originating material” means a good or material that qualifies as originating in accordance with this Chapter;

“producer” means a person who engages in the production of a good;

“production”  means  operations  including  growing,  cultivating,  raising,  mining, harvesting,  fishing,  trapping,  hunting,  capturing,  collecting,  breeding,  extracting, aquaculture, gathering, manufacturing, working, processing, or assembling a good other than simple assembly[13];

“tariff classification” means the classification of a good according to the Harmonized System;

“territorial sea” means waters extending up to 12 nautical miles from the baseline as defined by the Parties in line with the United Nations Convention on the Law of the Sea, 1982; and

“Working Group on Rules of Origin” means the Working Group on Rules of Origin established pursuant to paragraph 1 of the Article 3.28 (Working Group on Rules of Origin).

Article 3.2 Origin Criteria

1.  Except as otherwise provided in this Chapter, each Party shall provide that a

good is originating if it is:

1. wholly obtained or produced entirely in the territory of one or both of the Parties as established in Article 3.3 (Wholly Obtained);
2. produced  entirely  in  the  territory  of  one  or  both  of  the  Parties, exclusively from originating materials; or
3. produced entirely in the territory of one or both of the Parties using non- originating  materials,  provided  the  good  satisfies  all  applicable requirements of Annex 3A (Product-Specific Rules of Origin),

in each case, provided the good satisfies all other applicable requirements of this Chapter[14].

Article 3.3
Wholly Obtained

1. Each Party shall provide that for the purposes of subparagraph 1(a) of Article
   2. (Origin Criteria) the following goods shall be considered as wholly obtained or produced entirely in one or both of the Parties if they are:

1. minerals,  mineral  goods  and  other  non-living  natural  resources extracted or taken from there;
2. plant  and  plant  goods,  including  fruits,  flowers,  vegetables,  trees, seaweed,  and  live  plants,  or  fungi,  or  algae,  grown,  harvested, cultivated, picked or gathered there;
3. live animals born and raised there;
4. goods obtained from live animals raised[15] there;
5. goods obtained by hunting, trapping, fishing or aquaculture conducted there, but not beyond the outer limits of a Party’s territorial sea;
6. fish, shellfish and other marine life taken from the sea, seabed or subsoil outside the territorial sea of each Party and outside the territorial sea of non-Parties in accordance with international law, by vessels that are registered with a Party and entitled to fly the flag of that Party;

7. a good produced from the goods referred to in subparagraph (f) on a factory ship that is registered with a Party and entitled to fly the flag of that Party;
8. minerals, mineral goods and other non-living natural resources, taken or extracted from the seabed or subsoil, outside the territories of the Parties, and beyond areas over which non-parties exercise jurisdiction; provided that that Party or person of the Party has rights to exploit such seabed or subsoil;
9. a good, excluding precious metals, that is:

1. waste or scrap derived from consumption or production there; or
2. waste  or  scrap  derived  from  used  goods  collected  there, provided that those goods are fit only for the recovery of raw materials; or

10. goods and their derivatives produced there exclusively from goods referred to in subparagraphs (a) through (i).

Article 3.4
Value of the Good

1. For the purposes of this Chapter, each Party shall provide that the value of the good may be ex-works price or free-on-board (FOB) value.
2. The ex-works price is either:

1. the price paid or payable for the good to the producer at the place where the last production was carried out, and shall include the value of all materials; or
2. the price actually paid or payable for the good when sold for export.

3. If there is no price paid or payable or if it does not include the value of all materials, the ex-works price:

1. shall include the value of all materials and  the cost of production employed  in  producing  the  good,  calculated  in  accordance  with generally accepted accounting principles; and
2. may include amounts for general expenses and profit to the producer that can be reasonably allocated to the good.

4. For the purposes of calculating the value of the good in accordance with paragraphs 2 or 3, the ex-works price shall:

1. not take into account any internal taxes which are, or may be, repaid when the good obtained is exported; and
2. exclude any costs incurred subsequent to the good leaving the place where  the  last  production  was  carried  out,  such  as  transportation, loading, unloading, handling or insurance.

5. The FOB value shall be the price actually paid or payable to the exporter for a good when loaded onto the carrier at the named port of exportation, including the cost of the product, and all costs necessary to bring the good onto the carrier, not taking into account any internal taxes which are, or may be, repaid when the good obtained is exported.

Article 3.5
Qualifying Value Content

1. Where Annex 3A (Product Specific Rules of Origin) specifies a qualifying value content test to determine whether a good is originating, each Party shall provide that the qualifying value content shall be calculated using one of the following methods:

1. Build-Down Method: based on the value of non-originating materials

value of the good-value of nonoriginating materials
QVC=  ×100 value of the good

2. Build-Up Method: based on the value of originating materials

QVC=  value of originating materials ×100 value of the good

where,  QVC  is  the  qualifying  value  content  of  a  good,  expressed  as  a percentage.

2. Each Party shall provide that the value of a material shall be:

1. for a material imported by the producer of the good, the price actually paid or payable for the material at the time of importation, or other value determined in accordance with the Customs Valuation Agreement, including the costs incurred in transporting the material to the port or place  of  importation,  such  as  transportation,  loading,  unloading, handling or insurance;
2. for a material acquired in the territory where the good is produced:

1. the price paid or payable by the producer in the Party where the producer is located;
2. the  value  as  determined  for  an  imported  material  in subparagraph (a); or

3. the earliest ascertainable price paid or payable in the territory of the Party; or

3. for  a  material  that  is  self-produced,  all  the  costs  incurred  in  the production of the material, which includes general expenses.

3. For an originating material, the following expenses may be added to the value of the material, if not included under paragraph 2:

1. the costs of freight, insurance, packing, and all other costs incurred to transport the material to the location of the producer of the good;
2. duties, taxes, and customs brokerage fees on the material, paid in the territory  of  a  Party,  other  than  duties  and  taxes  that  are  waived, refunded, refundable, or otherwise recoverable, which include credit against duty or tax paid or payable; and
3. the cost of waste and spoilage resulting from the use of the material in the production of the good, less the value of reusable scrap or by- product.

4. For a non-originating material or material of undetermined origin, the following expenses, where included under paragraph 2, may be deducted from the value of the material:

1. the costs of freight, insurance, packing, and all other costs incurred in transporting the material to the location of the producer of the good;
2. duties, taxes, and customs brokerage fees on the material paid in the territory of one or both Parties, other than duties and taxes that are waived, refunded, refundable, or otherwise recoverable, which include credit against duty or tax paid or payable; and
3. the cost of waste and spoilage resulting from the use of the material in the production of the good, less the value of reusable scrap or by- product.

5. If the cost or expense listed in paragraphs 3 or 4 is unknown or documentary evidence of the amount of the adjustment is not available, then no adjustment is allowed for that particular cost or expense.

Article 3.6
Materials Used in Production

1. Each Party shall provide that if a non-originating material undergoes further production such that it satisfies the requirements of this Chapter, the material is  treated  as  originating  when  determining  the  originating  status  of  the subsequently produced good, regardless of whether that material was produced by the producer of the good.

2. Each Party shall provide that  if a non-originating material is used in the production of a good, the following may be counted as originating content in determining  whether  the  resulting  good  meets  a  qualifying  value  content requirement:

1. the value of processing of the non-originating material undertaken in the territory of the exporting Party; and
2. the value of any originating material used in the production of the non- originating material undertaken in the territory of one or both of the Parties.

Article 3.7
Non-Qualifying Operations

1. Each Party shall provide that, notwithstanding any provisions in this Chapter, a good shall not be considered to be originating merely by undergoing any of the following operations in the territory of that Party:

1. operations to ensure the preservation of products in good condition during transport and storage (such as drying, freezing or thawing, keeping  in  brine,  removal  of  damaged  parts)  and  other  similar operations;
2. changes of packaging and breaking up and assembly of packages;
3. washing, cleaning, removal of dust, oxide, oil, paint or other coverings;
4. for textiles: attaching accessory articles such as straps, bands, beads, cords, rings and eyelets; ironing or pressing of textiles;
5. simple painting and polishing;
6. husking, partial or total bleaching, polishing, and glazing of cereals and rice;
7. operations to colour sugar or form sugar lumps;
8. peeling  and  removal  of  stones  and  shells  from  fruits,  nuts  and vegetables;
9. sharpening, simple grinding or simple cutting;
10. simple operations such as removal of dust, sifting, screening, sorting, classifying, grading, or matching;
11. simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;
12. affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging;

13. simple mixing of goods, whether or not of different kinds; mixing of sugar or any other sweetening matter to any good;
14. simple assembly of parts of articles to constitute a complete article or disassembly of products into parts;
15. slaughter of animals;
16. simple testing, calibration, inspection or certification;
17. dilution with water or another substance that does not materially alter the characteristics of the good;
18. a  production  or  pricing  practice  in  respect  of  which  it  may  be demonstrated, on the basis of a preponderance of evidence, that the object was to circumvent the provisions of this Chapter; or
19. any  combination  of  two  or  more  operations  in  subparagraphs  (a) through (r)

2. For the purposes of paragraph 1, “simple” describes an activity which needs neither special skills nor machines, apparatus or equipment especially produced or installed to carry out the activity.

Article 3.8 Cumulation

Each Party shall provide that an originating good or material in the territory of one Party, under the terms of Article 3.2 (Origin Criteria) and all the other applicable requirements of this Chapter, that is incorporated in the production of a good in the territory of the other Party is considered to originate in the territory of the other Party.

Article 3.9 Tolerance

1. Each Party shall provide that a good containing non-originating materials that does not satisfy the applicable change in tariff classification requirement or wholly obtained requirement specified in Annex 3A (Product Specific Rules of Origin) for the good is nonetheless originating if:

1. in the case of a good in Chapters 1 through 3, 5, 6, 10 and 14 of the Harmonized System:

1. the value of those non-originating materials does not exceed 7.5 percent of the value of the good; or
2. the  net  weight  of  those  non-originating  materials  does  not exceed 7.5 percent of the net weight of the good;

and the good satisfies all other applicable requirements of this Chapter;

2. in the case of a good in Chapters 4, 7 through 9, 11 through 13 and 15 through 24 of the Harmonized System:

1. the value of those non-originating materials does not exceed
   5. percent of the value of the good; or
2. the  net  weight  of  those  non-originating  materials  does  not exceed 12.5 percent of the net weight of the good;

and the good satisfies all other applicable requirements of this Chapter; or

3. in the case of a good in Chapters 25 through 98 of the Harmonized System, the value of those non-originating materials does not exceed

12.5 percent of the value of the good and the good satisfies all other applicable requirements of this Chapter.

2. If a good is also subject to a qualifying value content requirement, the value of those non-originating materials shall be included in the value of non-originating materials for any applicable qualifying value content requirement.

Article 3.10
Fungible Good s and Materials

1. Each  Party  shall  provide  that  a  fungible  good  or  material  is  treated  as originating based on the:

1. physical segregation of each fungible good or material; or
2. use of any inventory management method recognised in the generally accepted accounting principles of the Party where the production is performed, if the fungible good or material is commingled, provided that the inventory management method selected is used throughout the fiscal  year  of  the  person  that  selected  the  inventory  management method.

2. The inventory management method chosen must:

1. allow a clear distinction to be made between originating and non- originating  materials  including  materials  of  undetermined  origin acquired or kept in stock; and
2. ensure that, over the relevant accounting period of 12 months, no more goods or materials receive originating status than would have been the case if the fungible goods or materials had been physically segregated.

3. For greater certainty and in accordance with subparagraph 1(b) of Article 3.24 (Record Keeping Requirements), a producer using an inventory management system shall keep records of the operation of the system that are necessary for the authority of the Party concerned to verify compliance with the provisions of this Chapter.

Accessories, Spare Parts or Tools

1. Each Party shall provide that the origin of the accessories, spare parts, tools or instructional or other information materials presented with a good:

1. shall be disregarded in determining whether a good satisfies a process or change in tariff classification or wholly obtained requirement for the good; and
2. shall be taken into account as originating or non-originating materials, as the case may be, in calculating the qualifying value content of the good, if the good is subject to a qualifying value content requirement

2. Paragraph 1 shall only apply where:

1. the accessories, spare parts, tools and instructional or other information materials presented with the good are not invoiced separately from the good; and
2. the  quantities  and  value  of  the  accessories,  spare  parts,  tools  and instructional or other information materials presented with the good are customary for that good.

Article 3.12
Packaging and Packing Materials

1. Each Party shall provide that for the purpose of determining whether a good is originating, packaging and packing materials and containers in which a good is packaged for retail sale shall, if classified with the good, be:

1. disregarded in determining whether a good satisfies a process or change in tariff classification or wholly obtained requirement for the good; and
2. taken into account as originating or non-originating materials, as the case may be, in calculating the qualifying value content of the good.

2. Each Party shall provide that packaging and packing materials and containers, used for the shipment of a good shall be disregarded in determining whether a good is originating.

Article 3.13
Indirect Materials

Indirect materials shall neither be considered originating nor non-originating for the purposes of calculating qualifying value content pursuant to Article 3.5 (Qualifying Value Content).

Non-Alteration

1. Each Party shall provide that an originating good retains its originating status if the good has been transported to the importing Party without passing through the territory of a non-Party.
2. Each Party shall provide that an originating good transported through or stored in a non-Party shall retain its originating status provided it:

1. remains under customs control, such as in a warehouse, and is not released to free circulation or trade[16] in the territory of any non-Party; and
2. does not undergo further production or any other operation outside the territories of the Parties, other than unloading, reloading, splitting up of loads, separation from bulk, storing, labelling, marking, bottling,[17] or any operation necessary to preserve it in good condition.

3. An importer shall provide to the customs authority of the importing Party upon request:

1. information,  including  documentation,  demonstrating  that  the conditions set out in paragraph 2 have been fulfilled; and
2. where bottling has taken place in a non-Party, transportation documents and commercial documents indicating the entire transport route of the good from the exporting party to the importing party, and information including documentation demonstrating that the good remained under customs control, such as a non-manipulation certificate issued by a customs authority in the non-party.

Section B
Origin Procedures

Article 3.15 Proof of Origin

1. Each Party shall provide that a claim for preferential tariff treatment is based on an applicable proof of origin:

1. for importers in the United Kingdom, an applicable proof of origin shall be:

1. an origin declaration completed by the exporter or producer;
2. a certificate of origin issued by an issuing authority; or
3. the importer’s knowledge that the good is originating; and

2. for importers in India, an applicable proof of origin shall be an origin declaration completed by the exporter or producer.

2. Each Party shall provide that an origin declaration or a certificate of origin:

1. is valid for 12 months from the date of completion in the case of an origin declaration, or date of issue in the case of a certificate of origin, or for such longer period specified by the laws and regulations of the importing Party;
2. is  submitted  to  the  customs  authority  of  the  importing  Party  in accordance with the laws and regulations of the importing Party;
3. shall follow the appropriate prescribed structure as set out in Annex 3B (Origin Declaration  Template) or Annex  3C (Certificate of Origin Template);
4. must be in writing, including electronic format;
5. must be accompanied by an invoice or any other commercial document that describes the goods concerned in sufficient detail to enable them to be identified;
6. may apply to importations of a single shipment of one or more goods; and
7. shall be in the English language.

3. For the United Kingdom, an origin declaration or a certificate of origin may apply to importations of multiple shipments of identical goods within any period specified in the origin declaration or the certificate of origin, where such period does not exceed 12 months.
4. In exceptional circumstances, the customs authority of the importing Party may accept a proof of origin for the purpose of granting preferential tariff treatment even after the expiry of its validity provided the failure to observe the time limit results from force majeure or other valid reasons beyond the control of the exporter and the goods have been imported before the expiry of the validity period.
5. An importing Party shall not deny a claim for preferential tariff treatment for the sole reason that an invoice or other commercial document referred to in subparagraph 2(e) was issued in a non-Party or not issued by the exporter or producer of a good, provided that it meets the requirements in this Chapter.
6. Subject to paragraph 7, each Party shall provide that a proof of origin shall be issued or completed prior to or at the time of importation.

7. Notwithstanding  paragraph  6,  a  proof  of  origin  may  be  completed  after importation, provided that the good was originating at the time of importation in order to qualify for a late claim as set out in Article 3.20 (Refunds and Claims for  Preferential  Tariff  Treatment  after  Importation).  A  proof  of  origin completed after importation shall bear the words “completed retrospectively” and shall include an explanation as to why the proof of origin is completed retrospectively.
8. A late claim made in accordance with Article 3.20 (Refunds and Claims for Preferential Tariff Treatment after Importation) shall not be rejected based on the explanation referenced in paragraph 7, if the good was originating at the time of importation.
9. If unassembled or disassembled goods within the meaning of General Rule 2(a) of the Harmonized System are imported by more than one shipment, a single origin declaration for such goods may be used on request of the importer and in accordance with the requirement laid down by the customs authority of the importing Party.[18]

Article 3.16

Basis of a Claim for Preferential Tariff Treatment

1. The United Kingdom shall provide that if the importer of a good makes a claim for preferential tariff treatment based on the importer’s knowledge that the good is originating, the claim is made subject to the importer having documentation demonstrating that the good is originating. Such documentation may have been provided to the importer by the exporter, producer or any other person.
2. Each Party shall provide that if a producer declares the origin of a good, the origin declaration is completed on the basis of the producer having information that the good is originating.
3. Each Party shall provide that, if the exporter is not the producer of the good and the exporter declares the origin of a good, the origin declaration is completed on the basis of the exporter having information to demonstrate that the good is originating, which may include a reliance on the producer’s information.
4. India shall provide that if the issuing authority issues a certificate of origin, the certificate of origin is issued on the basis of the issuing authority receiving information that the good is originating from the exporter or the producer.
5. For greater certainty, nothing in this Article shall be construed to allow the importing Party to require an importer to request the exporter or producer to provide confidential information to the importer.
6. For the purpose of enabling India to establish the authenticity of an origin declaration prior to an Indian importer making a claim for preferential tariff treatment,  subject  to  paragraph  8  and  Annex  3E  (Data  Protection  and Processing of Personal Information), there shall be an authentication process that is provided for in accordance with paragraph 7.

7  The Parties shall, on entry into force of this Agreement, agree and provide for the modalities of the authentication process referred to in paragraph 6 which

shall include ensuring that the necessary systems for enabling the electronic exchange of information are in place, following the framework set out in Annex 3D (Framework for the Authentication Process of Origin Declarations).

8.  Annex 3E (Data Protection and Processing of Personal Information) shall apply

to information processed by the Parties or shared between the Parties pursuant to  the  authentication  process  referred  to  in  paragraph  7  and  Annex  3D (Framework for the Authentication Process of Origin Declarations). The Parties shall, if appropriate, mutually agree to modify Annex 3E (Data Protection and Processing of Personal Information).

Article 3.17
Certificate of Origin

1. A certificate of origin shall be issued by an issuing authority.
2. India shall exchange names of the issuing authorities and their specimen seals with His Majesty’s Revenue and Customs.
3. India shall promptly inform His Majesty’s Revenue and Customs of any change in names of the issuing authorities and their specimen seals.

Article 3.18

Exemptions from Proof of Origin Requirements

1. For the United Kingdom, by way of derogation from Articles 3.15 (Proof of Origin) and 3.16 (Basis of a Claim for Preferential Tariff Treatment), provided that a good has been declared to customs as meeting the requirements of this Chapter and the customs authority of the United Kingdom has no reasonable doubts as to the veracity of that customs declaration, the United Kingdom shall grant preferential tariff treatment to that good if:

1. the customs value of the importation does not exceed 1,000 pounds sterling or any higher amount as the United Kingdom may specify; or
2. it is a good for which the United Kingdom has waived the requirements set out in Articles 3.15 (Proof of Origin) and 3.16 (Basis of a Claim for Preferential Tariff Treatment).

2. At the first meeting of the Working Group on Rules of Origin, the Parties may commence a review of this Article. The review shall consider the introduction of an exception to Articles 3.15 (Proof of Origin) and 3.16 (Basis of a Claim for Preferential Tariff Treatment) for all low value goods.

3. Paragraph  1  does  not  apply  if  the  importation  forms  part  of  a  series  of importations which the customs authority of the United Kingdom reasonably considers to have been carried out or planned for the purpose of evading compliance with its laws and regulations governing claims for preferential tariff treatment made under this Agreement.
4. A Party shall provide that the importer shall be responsible for the correctness of the declaration referred to in paragraph 1 of this Article and for compliance with the requirements of this Chapter.

Article 3.19

Determinations of Claims for Preferential Tariff Treatment

1. Except as otherwise provided in paragraph 2, each Party shall grant a claim for preferential tariff treatment made in accordance with this Chapter for a good that, on or after the date of entry into force of this Agreement, arrives in that Party or is released from customs control in that Party.
2. The importing Party may deny a claim for preferential tariff treatment if:

1. it determines that the good does not qualify as originating within the terms of this Chapter or does not satisfy the requirements of this Chapter;
2. pursuant to a verification under Article 3.25 (Verification of Origin), it has not received sufficient information, including any information that may have been received or provided by the competent authority of the exporting Party, to determine:

1. that the good qualifies as originating, or
2. that the importer, exporter, or producer has complied with the requirements of this Chapter;

3. the exporter, producer, or importer fails to respond to a written request for information in accordance with Article 3.25 (Verification of Origin); or
4. the importer, exporter, or producer fails to comply with the relevant requirements for obtaining preferential tariff treatment.

3. If the importing Party denies a claim for preferential tariff treatment, it shall issue  a  determination  to  the  importer  that  includes  the  reasons  for  the determination. The customs authority of the importing Party may also share the determination and reasons for the determination with the customs authority of the exporting Party.

Refunds and Claims for Preferential Tariff Treatment After Importation

1. Each Party shall provide that:

1. an importer may make a late claim for preferential tariff treatment; and
2. subject to paragraph 2, it shall refund any excess duties paid for a good, if the importer did not make a claim for preferential tariff treatment at the time of importation, provided that the good would have qualified for preferential tariff treatment at the time of importation.

2. As a condition for a refund of excess duties under subparagraph 1(b), the importing Party shall require that the importer:

1. makes a claim for preferential tariff treatment in accordance with Article 3.15 (Proof of Origin); and
2. provides such documentation relating to the importation of the good as the importing Party may require. This may include a copy of the origin declaration where a claim is based on an origin declaration.

3. Each Party shall provide that a late claim for preferential tariff treatment may be made no later than one year after the date of importation or a longer period if specified in the importing Party’s laws and regulations.

Article 3.21

Incorrect Claims for Preferential Tariff Treatment

1. Each Party shall provide that, if the importer has reason to believe that the claim for preferential tariff treatment is based on incorrect information that could affect the accuracy or validity of the claim, the importer shall immediately correct the documentation relating to importation, notify the customs authority of the importing Party and pay any customs duty and, if applicable, penalties owed.
2. Each Party shall encourage its customs authority, when considering imposing a penalty in relation to a claim for preferential tariff treatment, to consider as a significant mitigating factor a notification given prior to the discovery of that error by the Party and, provided that in accordance with paragraph 1, the importer corrects the error and pays any duties owing.

Article 3.22
Errors and Discrepancies

1. A Party shall not reject a proof of origin due to minor errors or discrepancies, omissions of information or typing errors or formatting errors, provided these minor errors or discrepancies do not create doubt as to the originating status of a good.

2. Each Party shall provide that, if its customs authority determines that a proof of origin in respect of a good imported into that Party is illegible or defective on its face, the importer shall be granted a period of 30 days from the date of communication from the customs authority of the importing Party to provide a copy of the corrected proof of origin.

Article 3.23 Penalties

Each Party shall adopt or maintain measures imposing, where appropriate, criminal, civil, or administrative penalties for violations of its laws and regulations relating to this Chapter.

Article 3.24

Record Keeping Requirements

1. Each Party shall provide that an importer claiming preferential tariff treatment is required to keep and provide to the customs authority of the importing Party upon request:

1. the documentation related  to the importation, including any origin declaration or certificate of origin that served as the basis for the claim; and
2. any  records  necessary  to  demonstrate  the  good  satisfies  the requirements for obtaining originating status for a period of at least four years from the date of importation of the good, or such longer period as required by the laws and regulations of the importing Party.

2. Each Party shall provide that a producer or exporter is required to keep for a period of five years from the date of issuance of the certificate of origin or completion of the origin declaration, or such longer period as the exporting Party specifies, documentation related to the importation, including any origin declaration or certificate of origin and, where applicable, information from the supplier and all records thereof to prove origin.[19]
3. Each Party shall provide that an importer, exporter or producer in that Party may choose to maintain the records in paragraphs 1 and 2 in any medium that allows for prompt retrieval, including electronic, optical, magnetic, or written form in accordance with that Party’s laws and regulations.[20]
4. For greater certainty, these obligations shall apply to the inventory management system of the producer.

Verification of Origin

1. For  greater  certainty,  the  verification  of  origin  process  set  out  below  is subsequent to the checking of authenticity of the proof of origin in accordance with Article 3.16 (Basis of a Claim for Preferential Tariff Treatment). The mechanism based on Annex 3D (Framework for the Authentication Process of Origin  Declarations)  may  be  amended  by  mutual  agreement  by  the Subcommittee on Trade in Good s further to consideration by the Working Group on Rules of Origin.
2. Where a claim for preferential tariff treatment is based on the importer’s knowledge pursuant to paragraph 1 of Article 3.15 (Proof of Origin), for the purpose of determining whether a good imported into the United Kingdom is originating, the customs authority of the United Kingdom may conduct a verification by a written request for information from the importer of the good.[21]
3. Where a claim for preferential tariff treatment is based on an origin declaration or a certificate of origin, for the purpose of determining whether a good imported into the importing Party is originating, the customs authority of the importing Party may conduct a verification of the claim by requesting, in writing, information from the importer of the good in accordance with the laws and regulations of the importing Party.
4. Where the customs authority of the importing Party considers the information obtained under paragraph 3 is not sufficient to make a determination of origin, the customs authority of the importing Party shall make a written request for information from the competent authority of the exporting Party. The customs authority of the importing Party shall seek information necessary to verify the origin of the good and pertaining to the fulfilment of the requirements of this Chapter. The request shall be made no later than two years after the date on which the claim for preferential tariff treatment was made.
5. A request for assistance relating to the verification of origin in respect of a claim for preferential tariff treatment under this Agreement may be made after the  two-year  time  period  set  out  in  paragraph  4  in  accordance  with  the Agreement between the Government of the United Kingdom of Great Britain and  Northern  Ireland  and  the  Government  of  the  Republic  of  India  on Cooperation and Mutual Administrative Assistance in Customs Matters signed in London on 31 May 2021.[22] Such requests may include a request for the information referred to in paragraph 6. For greater certainty, Article 3.19 (Determinations  of  Claims  for  Preferential  Tariff  Treatment)  remains applicable pursuant to such a request. In the case of suspected fraud, collusion, wilful misstatement, and suppression of facts where such a request is made within a period of five years from the date on which the claim for preferential tariff treatment was made, the requested Party shall ensure that it responds to

the request within 12 months. In exceptional cases, the Parties may by mutual agreement agree to extend this period for a further six months.

6. A request made pursuant to paragraph 4 may also include a request for the competent authority of the exporting Party to verify specific information held by the exporter, producer or supplier necessary to determine the origin of the good, such as:

1. where the origin criterion is wholly obtained pursuant to subparagraph
   1. of Article 3.2 (Origin Criteria), the applicable category (such as harvesting, mining, fishing), and the place of production;
2. where the origin criterion is based on the good having been produced entirely pursuant to subparagraph (b) of Article 3.2 (Origin Criteria), the  information  on  the  origin  of  the  materials  used,  including information referred to in subparagraphs (d), (e) and (f), and the place of production;
3. where the origin criterion is based on the good satisfying all applicable requirements  of  Annex  3A  (Product  Specific  Rules  of  Origin)  in accordance with subparagraph (c) of Article 3.2 (Origin Criteria), the information  on  the  origin  of  the  materials,  including  information referred to in subparagraphs (d), (e) and (f), and the place of production;
4. where the origin criterion is based on a change in tariff classification, a list of all the non-originating materials used in the production of the good in a Party, including their tariff classification (in two, four, or six- digit format, depending on the relevant product-specific rule of origin);
5. where the origin criterion is based on a value method, the value of the final good and the value of all the non-originating materials used in the production of that good if the build down method is used or the value of all originating materials used in the production if the build-up method is used as well as other relevant  elements, including expenses, in accordance with Article 3.5 (Qualifying Value Content).
6. where the origin criterion is based on a specific production process, a description of that specific process;
7. where the good has acquired originating status pursuant to paragraph 1 of  Article  3.6  (Materials  Used  in  Production)  or  Article  3.8 (Cumulation), information on the origin of the materials used and the final good, including information referred to in subparagraphs (d), (e) and (f), and the place of production;
8. information on any tolerances relied on under Article 3.9 (Tolerance);
9. information relating to compliance with the non-alteration provisions under Article 3.14 (Non-Alteration);
10. any other information including specific documentation or production process; or

11. supporting documentation, where appropriate.

7. The competent authority of the exporting Party shall provide the customs authority of the importing Party with a written acknowledgement of receipt of the request made pursuant to paragraph 4 or 6 within a period of 30 days after the date of the request.
8. Following  a  request  under  paragraph  4,  the  competent  authority  of  the exporting Party may conduct a verification by one or more of the following activities:

1. requesting, in writing, specific information and documentation from the exporter, producer or supplier referred to in paragraph 6;
2. requesting,  in  writing  (including  by  way  of  questionnaire),  such information from the exporter, a producer, or a supplier to ascertain the veracity of the information that formed the basis of the proof of origin; and
3. visiting the premises of the exporter, producer, or supplier to review the records referred to in paragraph 2 of Article 3.24 (Record Keeping Requirements), or to observe the facilities, processes, equipment or tools used in the production of the good, or to gather further evidence to verify the originating status of the goods.

9. As soon as possible, and in any event within seven months of receiving a request under paragraph 4 the competent authority of the exporting Party shall provide the customs authority of the importing Party with a verification report. In exceptional cases, the Parties may agree, by mutual agreement, to extend this period by a further three months. The verification report shall include the following:

1. subject to paragraph 10, any available information, including specific documentation, which the customs authority of the importing Party requested the competent authority of the exporting Party to verify, pursuant to paragraph 6;
2. a description of the good that is subject to examination, including its tariff classification in 2, 4 or 6-digit format, depending on the origin criterion;
3. a description of the production process;
4. information  on  the  manner  in  which  the  verification  of  the  good pursuant to paragraph 8 was conducted including the subject and scope of the verification; and
5. supporting documentation, where appropriate.

10. Notwithstanding paragraph 9, the competent authority of the exporting Party shall not provide information to the customs authority of the importing Party if that information is deemed confidential by the exporter, producer or supplier. In such circumstances, the competent authority of the exporting Party shall confirm if it has reviewed the information the importing Party requested it to verify pursuant to paragraphs 4 and 6 and shall list the sources of information reviewed, stating whether the information supports the claim for preferential tariff treatment.

11. If, upon receiving the verification report under paragraph  9, the customs authority of the importing Party is unable to make a determination, it may request that the competent authority of the exporting Party verifies specific additional information, as set out in the request, relating to the origin of the good, which may include the information referred to in paragraph 6, by way of a written request to the exporter, producer or supplier.
12. In exceptional circumstances, if, following a request under paragraph 11, the customs authority of the importing Party is unable to make a determination, it may request that the competent authority of the exporting Party conducts a visit to the exporter, producer or supplier. The customs authority of the importing Party  shall  only  make  a  request  where  it  reasonably  considers  the  visit necessary to make a determination. The request for such a verification visit shall be made no later than 30 days of the receipt of the response from the competent authority of the exporting Party to a request made under paragraph
    11. The competent authority of the exporting Party shall respond to the request for a visit within 45 days.
13. Upon acceptance of a request for a visit under paragraph 12, the competent authority of the exporting Party shall give a notice of at least 21 days to the competent authority of the importing Party so as to enable arrangements for the visit.
14. Subject to any reasonable conditions set out by the competent authority of the exporting Party, such as health and safety requirements, the customs authority of the importing Party may designate up to two observers to be present during the verification visit conducted by the customs authority of the exporting Party under paragraph 12, provided that:

1. any person designated as an observer is a government official of the importing Party; and
2. any observer acts through the competent authority of the exporting Party and does not, on its own initiative, look for documents, conduct any searches, or question the exporter, producer or supplier directly.

15. The competent authority of the exporting Party shall share the information on the visit including the manner in which the visit was conducted as well as the subject and scope of the verification within 45 days of the conclusion of the visit.
16. A verification under this Article may be conducted at any time after the claim for preferential tariff treatment is made.
17. A request for verification under this Article shall be conducted on the basis of risk assessment methods, which may include random selection, or on the basis of intelligence.

18. During verification, the importing Party may allow the release of the good, subject to payment of any duties or provision of any security as provided for in its laws and regulations. In accordance with the laws and regulations of the importing Party, if as a result of the verification the importing Party determines that  the  good  meets  all  the  requirements  of  this  Chapter,  it  shall  grant preferential tariff treatment to the good and refund any excess duties paid or release any security provided, unless the security also covers other obligations.
19. The customs authority of the importing Party shall reserve the right to issue the final determination of origin in accordance with Article 3.19 (Determinations of Claims for Preferential Tariff Treatment), provided that the determination takes into account the information provided to it by the competent authority of the exporting Party as well as any independent findings or investigation.
20. The customs authority of the importing Party shall:

1. make  a  determination  following  a  verification  as  expeditiously  as possible and no later than one year from the date it receives information which,  in  its  opinion,  is  sufficient  to  enable  it  to  make  such  a determination. If permitted by its laws and regulations, a Party may extend this period in exceptional cases, such as where the information concerned is complex. This time period will not apply to verifications pertaining to cases of suspected fraud, collusion, wilful misstatement, and suppression of facts referred to in paragraph 5;
2. provide the importer with a written determination of whether the good is originating that includes the reasons for the determination; and
3. provide the competent authority of the exporting Party with a written determination of whether the good is originating including the reasons for that determination.

21. The competent authorities of the Parties shall cooperate in the overall operation and administration of the verification process including establishing priorities, by mutual agreement, if there are a significant number of requests.
22. The customs authorities of the Parties shall bear their own costs in carrying out the activities referred to in this Article.

Article 3.26

Temporary Suspension of Preferential Tariff Treatment[23]

1. Subject to the possibility of exemption under paragraph 11, the importing Party may, in accordance with the procedure laid down in paragraph 3, temporarily suspend preferential tariff treatment in respect of a good for which an exporter or producer has completed a proof of origin, if:

1. a good has been subject to verification in accordance with Article 3.25 (Verification of Origin) on at least two separate occasions and the second occasion is in respect of a proof of origin dated at least one month after the competent authority of the importing Party provides the determination to the competent authority of the exporting Party in respect of the first occasion; and
2. each verification results in the denial of preferential tariff treatment in accordance with Article 3.19 (Determinations of Claims for Preferential Tariff Treatment).

2. Suspension of preferential tariff treatment under paragraph 1 shall only apply to a good imported after the suspension is initiated, if that good is:

1. classified under the same classification code as specified in the import declaration  of  the  good  that  was  subject  to  verification  under paragraph 1; and
2. exported or produced by the exporter or producer who completed the proof of origin of the good that was subject to verification under paragraph 1.

3. If  the  importing  Party  intends  to  temporarily  suspend  preferential  tariff treatment  in  accordance  with  paragraph  1,  it  shall  notify  the  competent authority of the exporting Party at least 15 days prior to the commencement of any suspension. This notification shall include the following:

1. the name of the exporter or producer and their reference number;
2. detailed  reasons  for  the  intention  to  suspend  preferential  tariff treatment;
3. a detailed description of the good subject to suspension, including the corresponding commodity code as specified in the import declaration, and the description of the good as set out in the proof of origin;
4. the time period for which the temporary suspension is to be in effect;
5. information on the measures necessary for the restoration of preferential tariff treatment; and
6. any other relevant information.

4. Temporary suspension pursuant to paragraph 1 shall apply only for the period necessary to counteract breaches or circumventions of this Chapter and to protect the financial interests of the importing Party. The competent authority of the importing Party shall restore preferential tariff treatment suspended in accordance with paragraph 1 if the competent authority of the exporting Party provides evidence and the Parties agree that the conditions that gave rise to the suspension no longer persist. If the importing Party is not satisfied that the evidence  provided  by  the  competent  authority  of  the  exporting  Party demonstrates that the conditions that gave rise to the suspension no longer persist, they shall provide their reasoning. Where the conditions that gave rise

to the suspension persist at the expiry of the period of the temporary suspension, the importing Party may decide to renew the suspension. Any renewal of suspension shall be notified to the competent authority of the exporting Party.

5. Subject to the possibility of exemption under paragraph 11, the importing Party may temporarily suspend the relevant preferential tariff treatment for future imports of the same good classified under an identified classification code as specified in the import declaration in accordance with the procedure laid down in paragraphs 7 to 9 if:

1. the  importing  Party  suspects,  based  on  verifiable  information  that deliberate breaches of this Chapter have been committed in respect of that good;
2. the good has been subject to verification in accordance with Article 3.25 (Verification of Origin) for at least two different exporters or producers, each being subject to verification on at least two separate occasions, and the second occasion is in respect of a proof of origin dated at least one month after the competent authority of the importing Party provides the determination to the competent authority of the exporting Party in respect of the first occasion; and
3. each verification results in the denial of preferential tariff treatment in accordance with Article 3.19 (Determinations of Claims for Preferential Tariff Treatment).

6. For  the  purposes  of  paragraph  5,  the  exporters  or  producers  subject  to verification shall collectively account for the majority of the total exports of those goods from the exporting Party to the importing Party in the 12 months preceding  the  date  of  the  first  request  for  verification  referred  to  in subparagraph 5(b).
7. If  the  importing  Party  intends  to  temporarily  suspend  preferential  tariff treatment in accordance with paragraph 5, it shall notify the Working Group on Rules  of  Origin  and,  on  the  exporting  Party’s  request,  shall  enter  into consultations with the exporting Party. The importing Party shall provide that the notification to the Working Group on Rules of Origin includes evidence that the requirements in paragraphs 5 and 6 have been met. Consultations shall aim to clarify the grounds for intention to suspend, be used to discuss any mitigating factors, and explore possible solutions to avoid suspension. No suspension shall take place until the consultation process has concluded, unless the Parties agree otherwise.
8. If the Parties fail to agree on a mutually acceptable solution or no consultations have been entered into within one month after the date of notification made in accordance with paragraph 7, or such other period as the Parties may mutually agree, the importing Party may temporarily suspend the relevant preferential tariff treatment. In that case, the importing Party shall notify the temporary suspension,  including  the  period  during  which  it  intends  the  temporary suspension to apply, to the Working Group on Rules of Origin without delay.
9. Temporary suspension pursuant to paragraph 5 shall apply only for the period necessary to counteract breaches or circumventions of this Chapter and to protect the financial interests of the importing Party. The Parties shall keep any suspension under review through the Working Group on Rules of Origin and, where it is agreed by the Parties that the suspension is no longer necessary, the importing Party shall bring it to an end. Where the conditions that gave rise to the suspension pursuant to paragraph 5 persist at the expiry of the initial period of the temporary suspension, the importing Party may decide to renew the suspension. Any renewal of suspension shall be notified to the exporting Party.

10. Each Party shall publish, in accordance with its internal procedures, notices to importers about any decision concerning temporary suspension referred to in paragraph 5.
11. Notwithstanding paragraphs 1 and 5, if an exporter or producer is able to satisfy the exporting Party that such goods are fully compliant with the requirements of this Chapter and the importing Party agrees, the importing Party shall exempt those goods from the suspension.

Article 3.27 Confidentiality

1. This Chapter shall not require a Party to furnish or allow access to information where the use or disclosure of that information would impede law enforcement or would be contrary to that Party’s law.
2. Each Party shall maintain, in conformity with its law, the confidentiality of any information collected pursuant to this Chapter and shall protect that information from disclosure that could prejudice the competitive position of the person to whom the information relates.
3. Each Party shall ensure that confidential information collected pursuant to this Chapter  shall  not  be  used  or  disclosed  for  purposes  other  than  the administration  and  enforcement  of  determination  of  origin  or  of  customs matters, except with the permission of the person or Party who provided the confidential information.
4. Notwithstanding paragraph 2 and 3, if the Party receiving or obtaining the information is required by its law to disclose the information for purposes other than the administration and enforcement of determination of origin or of customs matters, that Party shall, where possible, notify the person or Party who provided the information of such use. That notification shall, where possible, be given in advance of such use.
5. Notwithstanding paragraph 3, a Party may allow information collected pursuant to this Chapter to be used in any administrative, judicial, or quasi-judicial proceedings instituted for failure to comply with customs-related laws and regulations implementing this Chapter. A Party shall, where possible, notify the person or Party who provided the information of such use. That notification shall, where possible, be given in advance of such use.

6. The Parties shall, if one of them so requests, exchange information on their respective law for the purpose of facilitating the operation and application of this Article.

Article 3.28

Working Group on Rules of Origin

1. The Parties hereby establish a Working Group on Rules of Origin composed of government representatives of each Party responsible for rules of origin matters to consider any matters arising under this Chapter.
2. The functions of the Working Group on Rules of Origin shall include:

1. cooperating in the administration and interpretation of this Chapter;
2. exchanging information on matters related to this Chapter;
3. communicating  and  updating  the  necessary  contact  details  of  the Working Group members for the purposes of this Chapter;
4. considering any matter referred to it by the Subcommittee on Trade in Good s or the Joint Committee; and
5. any other matter as the Working Group mutually agrees.

3. The Working Group on Rules of Origin shall meet within 12 months of the date of entry into force of this Agreement and thereafter at least once annually.
4. The Working Group on Rules of Origin shall report to the Subcommittee on Trade in Good s.

CHAPTER 4
TRADE REMEDIES

Section A
General Provisions

Article 4.1 Definitions

For the purposes of this Chapter:

“bilateral safeguard  measure”  means  a measure referred  to  in  paragraph  2  of Article 4.7 (Application of a Bilateral Safeguard Measure);

“elimination or reduction of a customs duty” means any elimination or reduction of customs duty in accordance with paragraph 1 of Article 2.6 (Treatment of Customs Duties – Trade in Good s);

in determining injury or threat thereof, a “domestic industry” means the producers as a whole of the like or directly competitive goods operating within the territory of a Party, or those whose collective output of the like or directly competitive goods constitutes a major proportion of the total domestic production of those goods;

“serious injury” means a significant overall impairment in the position of a domestic industry;

“threat of serious injury” means serious injury  that is clearly imminent and is determined on the basis of facts and not merely on allegation, conjecture or remote possibility; and

“transition period” means, in relation to a particular originating good, the period beginning on the date of entry into force of this Agreement and ending 14 years after the date of completion of the elimination or reduction of a customs duty on that particular  originating  good  in  accordance  with  Annex  2A  (Schedules  of  Tariff Commitments for Good s).

Article 4.2
Non-Application of Dispute Settlement

Neither Party shall have recourse to dispute settlement under Chapter 29 (Dispute Settlement) for any matter arising under Section B or Section C.

Section B

Anti-Dumping and Countervailing Measures

Article 4.3
General Provisions

The Parties affirm their rights and obligations under Article VI of GATT 1994, the Anti-Dumping Agreement, and the SCM Agreement.

Article 4.4 Investigations

1. After receipt by a Party’s investigating authority of a properly documented application for an anti-dumping or a countervailing investigation with respect to imports from the other Party, and before initiating an investigation, the Party shall  provide  written  notification  to  the  other  Party  of  its  receipt  of  the application.
2. Before initiating a countervailing investigation, a Party shall afford the other Party  a  meeting  to  consult  with  its  investigating  authority  regarding  the application.
3. The Parties reaffirm their rights and obligations under Articles 6.2 and 6.3 of the  Anti-Dumping  Agreement  and  Article  12.2  of  the  SCM  Agreement, including with respect to the rights of interested parties to present information orally  and  to  defend  their  interests  in  the  conduct  of  an  anti-dumping investigation or a countervailing duty investigation.
4. Notwithstanding paragraphs 2 and 3, nothing shall prevent the investigating authority  from  proceeding  to  initiate  and  conduct  the  investigation expeditiously.
5. A Party shall ensure, before a final determination is made, disclosure of the essential facts under consideration which form the basis for the decision whether to apply final measures. This is without prejudice to Article 6.5 of the Anti- Dumping Agreement and Article 12.4 of the SCM Agreement.

Article 4.5

Lesser Duty Rule and Public Interest Test

1. Should a Party decide to impose an anti-dumping duty pursuant to Article 9.1 of the Anti-Dumping Agreement, or countervailing duty pursuant to Article
   2. of the SCM Agreement, it shall apply a duty less than the margin of dumping or subsidy margin, if such a lesser duty would be adequate to remove the injury to the domestic industry, in accordance with the Party’s laws and regulations.

2. To the extent provided for under each Party’s laws, regulations and procedures, an anti-dumping duty or a countervailing duty shall not be applied by a Party

on the goods of the other Party if it is concluded that it is not in the public interest to apply the duty.

Section C

Global Safeguard Measures

Article 4.6

General Provisions and Transparency

1. The Parties affirm their rights and obligations concerning global safeguard measures under Article XIX of GATT 1994 and the Agreement on Safeguards.
2. A Party that initiates a safeguard investigatory process shall provide to the other Party an electronic copy of any notification given to the WTO Committee on Safeguards under Article 12.1 of the Agreement on Safeguards.
3. A Party adopting global safeguard measures shall endeavour to impose them in a manner least affecting bilateral trade.

Section D

Bilateral Safeguard Measures

Article 4.7

Application of a Bilateral Safeguard Measure

1. If, as a result of the elimination or reduction of a customs duty under this Agreement, an originating good from a Party is being imported into the territory of the other Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to a domestic industry, the other Party may adopt either of the bilateral measures provided for in paragraph 2.
2. If the conditions in paragraph 1 are met, the importing Party may apply one of the following bilateral safeguard measures:

1. suspension of the further reduction of the rate of customs duty on the good concerned provided for under this Agreement; or
2. increase in the rate of customs duty on the good concerned to a level which does not exceed the lesser of:

1. the most-favoured-nation applied rate of customs duty on the good in effect at the time the bilateral safeguard measure is applied; or
2. the most-favoured-nation applied rate of customs duty on the good in effect on the day immediately preceding the date of entry into force of this Agreement.

Article 4.8
Duration and Scope

1. A Party shall apply a bilateral safeguard measure to the extent and only for such period of time as may be necessary to prevent or remedy serious injury and to facilitate adjustment of the domestic industry.
2. The period of time referred to in paragraph 1 shall not exceed two years, except where the period may be extended for an additional period of no more than two years, provided that the investigating authority of the Party that applies the bilateral safeguard measure determines, in conformity with the procedures set out in Article 4.9 (Investigation Procedures) that the bilateral safeguard measure continues to be necessary to prevent or remedy serious injury and to facilitate adjustment, and provided that the  total duration  of the bilateral safeguard measure, including such extensions, does not exceed four years.
3. In order to facilitate adjustment in a situation where the expected duration of a bilateral safeguard measure exceeds one year, the Party that applies the bilateral safeguard measure shall progressively liberalise it at regular intervals during the period of application.
4. No bilateral safeguard measure shall be applied again to the import of an originating good that has previously been subject to such a bilateral safeguard measure for a period of time equal to the duration of the previous bilateral safeguard measure or one year since the expiry or termination of the previous bilateral safeguard measure, whichever is longer.
5. Notwithstanding paragraph 4, a bilateral safeguard measure with a duration of 180 days or less may be applied again to the import of an originating good if:

1. at least one year has elapsed since the date of introduction of a bilateral safeguard measure on the import of that good; and
2. a bilateral safeguard measure has not been applied on the same good more than twice in the five-year period immediately preceding the date of the first imposition of the bilateral safeguard measure.

6. When a Party ceases to apply a bilateral safeguard measure, the rate of customs duty shall be the rate that would have been in effect in accordance with the Party’s Schedule to Annex 2A (Schedules of Tariff Commitments for Good s) but for the bilateral safeguard measure.
7. Neither Party shall apply or maintain a bilateral safeguard measure beyond the expiration of the transition period.

Article 4.9
Investigation Procedures

1. A Party may apply a bilateral safeguard measure (other than on a provisional basis) only following an investigation by its investigating authority pursuant to the procedures set out in this Article. The investigation shall include reasonable public notice to all interested parties and public hearings or other appropriate means in which importers, exporters and other interested parties could present evidence  and  their  views,  including  the  opportunity  to  respond  to  the representations of other interested parties and to submit their views, among other things, as to whether or not the application of a bilateral safeguard measure would be in the public interest. The investigating authority shall publish a report setting forth its findings and reasoned conclusions reached on all pertinent issues  of  fact  and  law,  including  a  detailed  analysis  of  the  case  under investigation, as well as a demonstration of the relevance of factors examined in accordance with paragraph 2.

2. In the investigation to determine whether increased imports have caused or are threatening to cause serious injury to a domestic industry, the investigating authority shall evaluate all relevant factors of an objective and quantifiable nature having a bearing on the situation of the domestic industry, in particular, the rate and amount of the increase in imports of the good concerned in absolute and relative terms, the share of the domestic market taken by increased imports, and changes in the level of sales, production, productivity, capacity utilisation, profits and losses, and employment.
3. The determination referred to in paragraph 2 shall not be made unless the investigation demonstrates, on the basis of objective evidence, the existence of a causal link between increased imports of the good concerned and serious injury or threat thereof. Where factors other than increased imports are at the same time causing serious injury or threat thereof, such injury shall not be attributed to increased imports.
4. Any information which is by its nature confidential or which is provided on a confidential basis shall, upon cause being shown, be treated as such by the investigating  authority.  Such  information  shall  not  be  disclosed  without permission  of  the  party  submitting  it.  A  party  providing  confidential information may be requested to furnish non-confidential summaries thereof or, if such parties indicate that such information cannot be summarised, the reasons why a summary cannot be provided. However, if the investigating authority finds  that  a  request  for  confidentiality  is  not  warranted  and  if  the  party concerned is either unwilling to make the information public or to authorise its disclosure in generalised or summary form, the investigating authority may disregard such information unless it can be demonstrated to their satisfaction from appropriate sources that the information is correct.
5. An investigation shall not exceed one year from the date of initiation, but a Party may, in exceptional circumstances, extend the investigation for no more than a further three months. A Party extending an investigation shall notify the other Party in writing of its intention to extend the investigation as soon as possible and, in any event, within one year of the date of initiation of the investigation.

Article 4.10
Notification and Consultation

1. A Party shall immediately provide written notice to the other Party upon:

1. initiating  an  investigation  referred  to  in  Article  4.9  (Investigation Procedures) relating to serious injury, or threat thereof, and the reasons for it;
2. making a finding of serious injury or threat thereof caused by increased imports of an originating good of the other Party as a result of the elimination or reduction of a customs duty in accordance with Article

4.7 (Application of a Bilateral Safeguard Measure);

3. taking a decision to apply or extend a bilateral safeguard measure; or
4. taking  a  decision  to  modify  the  bilateral  safeguard  measure  for progressive liberalisation.

2. The Party proposing to apply a bilateral safeguard measure shall provide the other Party with all pertinent information which shall include:

1. in the written notice referred to in subparagraph 1(a), the reason for the initiation of the investigation, a precise description of the originating good  subject  to  the  investigation  including  its  subheading  of  the Harmonized System (for indicative purposes only), the period subject to the investigation, and the date of initiation of the investigation; and
2. in the written notice referred to in subparagraphs 1(b) through (d), evidence of serious injury or threat thereof caused by the increased imports, precise description of the good subject to the proposed bilateral safeguard measure including its subheading of the Harmonized System (for indicative purposes only), and where applicable, the proposed date of introduction, the extension or modification of the bilateral safeguard measure, its expected duration, and the timetable for the progressive liberalisation  of  the  bilateral  safeguard  measure  provided  for  in paragraph 3 of Article 4.8 (Duration and Scope).

3. A Party initiating an investigation shall, after notifying the other Party in accordance with paragraph 1, consult with the other Party as far in advance of applying a bilateral safeguard measure as practicable, with a view to reviewing the information arising from the investigation and exchanging views on the bilateral safeguard measure.

Article 4.11

Provisional Bilateral Safeguard Measures

1. In critical circumstances where delay would cause damage that would be difficult  to  repair,  a  Party  may  apply  a  bilateral  safeguard  measure  on  a provisional  basis  without  complying  with  the  procedural  requirements  of Article  4.10  (Notification  and  Consultation),  pursuant  to  a  preliminary determination that there is clear evidence that imports of a good originating in the other Party have increased as the result of the elimination or reduction of a customs duty under this Agreement, and that such imports cause or threaten to cause serious injury to the domestic industry. The duration of any provisional bilateral safeguard measure shall not exceed 200 days, during which time the

Party shall comply with the relevant procedural rules laid down in Article 4.9 (Investigation Procedures) such that its investigating authority carries out an investigation.

2. A Party shall make a notification to the other Party before taking a provisional bilateral safeguard measure referred to in paragraph 1.
3. Consultations between the Parties on the application of the provisional bilateral safeguard measure shall be initiated immediately after the provisional bilateral safeguard measure is applied.
4. The customs duty imposed as a result of the provisional bilateral safeguard measure shall be refunded if the subsequent investigation referred to in Article
   9. (Investigation Procedures) does not determine that the requirements of paragraph 1 of Article 4.7 (Application of a Bilateral Safeguard Measure) are met.
5. The duration of any provisional bilateral safeguard measure shall be counted as part of the period described in paragraph 2 of Article 4.8 (Duration and Scope).

Article 4.12 Compensation

1. A Party applying a bilateral safeguard measure shall consult with the other Party in order to mutually agree on appropriate trade liberalising compensation in the form of concessions having substantially equivalent trade effect or equivalent to the value of the additional duties expected to result from the application of the bilateral safeguard measure. The Party applying the bilateral safeguard measure shall provide an opportunity for these consultations no later than 30 days after the application of the bilateral safeguard measure.
2. If the consultations under paragraph 1 do not result in an agreement on trade liberalising compensation within 30 days, the Party whose goods are subject to the bilateral safeguard measure may suspend the application of substantially equivalent concessions to the trade of the Party applying the bilateral safeguard measure. This action shall be applied only for the minimum period necessary to achieve the substantially equivalent effects.
3. The right to take action referred to in paragraph 2 shall not be exercised for the first two years that the bilateral safeguard measure is in effect.
4. The Party against whose good the bilateral safeguard measure is applied shall notify the Party applying the bilateral safeguard measure in writing at least 30 days before suspending concessions in accordance with paragraph 2.
5. The obligation to provide compensation under paragraph 1 and the right to suspend concessions under paragraph 2 terminate on the termination of the bilateral safeguard measure.

Article 4.13

Non-Application of Multiple Safeguard Measures

1.  Neither Party shall apply, with respect to the same good, at the same time:

1. a bilateral safeguard measure in accordance with Section D (Bilateral Safeguard Measures); and
2. a measure under Article XIX of GATT 1994 and the Agreement on Safeguards.

CHAPTER 5

CUSTOMS AND TRADE FACILITATION

Article 5.1

Customs and Trade Facilitation

1. Each Party shall ensure that its customs laws, regulations, and procedures are applied in a manner that is consistent, transparent, and non-discriminatory.
2. The Parties affirm their rights and obligations under the Trade Facilitation Agreement.
3. Each Party shall endeavour to ensure that its import, export or transit formalities and procedures conform to international standards and recommended practices established by the World Customs Organization (the “WCO”) and under other relevant international agreements to which the Parties are party.
4. Each Party shall adopt or maintain simplified customs procedures, as set out in Article  5.4  (Simplified  Customs  Procedures),  and  work  towards  further simplification of its customs procedures, including by conducting periodic reviews, in order to facilitate trade.
5. The Parties shall seek to reinforce their cooperation to promote trade facilitation while ensuring effective customs control.

Article 5.2
Transparency and Publication

1. Each Party shall promptly publish online, in a non-discriminatory and easily accessible manner, and to the extent possible and practicable in the English language, its customs laws, regulations, and procedures, including:

1. hours  of  operation,  and  general  operating  procedures  related  to importation, exportation and transit, for customs offices at ports and border crossing points;
2. details of its enquiry points including points of contact and modes for making information enquiries;
3. its laws, regulations, and procedures for becoming a customs broker, for issuing  customs  broker  licenses  and  regarding  the  use  of customsbrokers;and
4. provisions to correct or disclose an error in a customs transaction, including the information required and, if applicable, the circumstances when penalties will not be imposed.

2. Each Party shall, as appropriate, provide for regular consultations between its border agencies and traders or other stakeholders located within its territory.

3. Each Party shall, in a manner consistent with its law and legal system, ensure that new or amended customs laws and regulations are published online, or information on them made otherwise publicly available, as early as possible before their entry into force to enable traders and other interested parties to become acquainted with them.
4. Paragraph 3 shall not apply to:

1. changes to the rates of customs duties;
2. measures that have a relieving effect;
3. measures the effectiveness of which would be undermined as a result of compliance with paragraph 3;
4. measures applied in urgent circumstances; or
5. minor changes to a Party’s law and legal system.

5. Each Party shall establish or maintain one or, if within its available resources, more enquiry points to address reasonable enquiries of interested parties or persons concerning customs matters.
6. Each Party shall endeavour not to require the payment of a fee for answering enquiries or providing required forms.If payment of a fee is required, the Party shall limit the amount of its fees and charges to the approximate cost of services rendered.
7. Each Party shall ensure that enquiry points answer enquiries and provide the forms and documents within a reasonable time period set by each Party, which may vary depending on the nature or complexity of the request.

Article 5.3

Data, Documentation and Automation

1. Each Party shall ensure, while maintaining appropriate customs controls, that data and documentation requirements are adopted or applied:

1. with the intention to facilitate a rapid release of goods; and
2. in a manner that aims to reduce the time and cost of compliance for traders and operators.

2. Each Party shall:

1. make electronic systems accessible to customs users, where appropriate and practicable, in an accessible format;
2. allow a customs declaration to be submitted in electronic format;
3. employ an electronic or automated risk management system;

4. permit the electronic payment of duties, taxes, fees and charges collected by its customs authority and incurred upon importation and exportation;
5. endeavour to implement common standards and elements for import and export data in accordance with the WCO Data Model;
6. take into account, as appropriate, standards, recommendations, models and  methods  developed  by  various  international  organisations, including the WCO, the United Nations Centre for Trade Facilitation and Electronic Business (“UNCEFACT”) and the WTO; and
7. work towards recognising each other’s data elements that may be drawn from the WCO Data Model and related WCO recommendations as well as  for  facilitating  government-to-government  electronic  sharing  of customs data.

3. The Parties shall endeavour to cooperate on the development of interoperable electronic  customs  systems  in  order  to  facilitate  trade  and  data  exchange between the Parties.

Article 5.4
Simplified Customs Procedures

1. Each Party shall adopt or maintain measures allowing traders or operators fulfilling criteria specified in its customs laws and regulations to benefit from further simplification of customs procedures.
2. The simplified customs procedures referred to in paragraph 1 shall include:

1. deferred payment of customs duties until after the release of those imported goods;
2. enabling the payment of  customs duties and taxes that  may cover multiple imports at periodic intervals, including fortnightly or monthly; and
3. use of a guarantee with a reduced amount or a waiver from the use of a guarantee.

3. The Parties shall endeavour to implement simplified customs procedures, as follows:

1. customs declarations containing a reduced set of data or supporting documents including for the movement of low-value consignments; and
2. aggregated customs declarations for the payment of customs duties and taxes that may cover multiple imports.

4. The Parties shall cooperate on and consider, as appropriate, further measures to reduce the administrative burden for economic operators in relation to imports and exports.