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Canada-Honduras Free Trade Agreement

Chapter Five: Customs Procedures

Section A – Definitions

Article 5.1: Definitions

For the purposes of this Chapter:

commercial importation means the importation of a good into the territory of a Party for:

competent authority means:

customs administration means the governmental authority that is responsible, under the law of a Party, for the administration of customs laws and regulations;

determination of origin means a determination regarding whether a good qualifies as originating in accordance with Chapter Four (Rules of Origin);

exporter in the territory of a Party means an exporter located in the territory of a Party that is required under this Chapter to maintain records in the territory of that Party regarding the exportation of a good;

importer in the territory of a Party means an importer located in the territory of a Party that is required under this Chapter to maintain records in the territory of that Party regarding importations of a good;

preferential tariff treatment means the duty rate applicable under this Agreement to an originating good;

value means value of a good or material, determined in accordance with the Customs Valuation Agreement.

The following terms have the same meaning as in Article 4.1 (Rules of Origin – Definitions):

Section B – Certification of Origin

Article 5.2: Certificate of Origin

1. The Parties shall establish, by the date of entry into force of this Agreement, a Certificate of Origin for the purpose of certifying that a good being exported from the territory of a Party into the territory of the other Party qualifies as originating. The Certificate of Origin may be modified after the date of entry into force, if the Parties so decide.

2. Each Party shall permit the Certificate of Origin for a good imported into its territory to be completed in English, French or Spanish.

3. Each Party shall:

4. Paragraph 3 does not require a producer to provide a Certificate of Origin to an exporter.

5. A Party shall permit a Certificate of Origin to apply to:

6. A Party shall ensure that the Certificate of Origin is accepted by its customs administration for at least 1 year after the date on which the Certificate of Origin was signed.

7. A Party shall accept a Certificate of Origin that is completed and signed by the exporter or producer of a good prior to entry into force of this Agreement, if the good is originating and is imported into the territory of a Party on or after entry into force of this Agreement.

Article 5.3: Obligations regarding Importations

1. Except as otherwise provided in this Chapter, each Party shall require an importer in its territory that claims preferential tariff treatment for a good imported into its territory from the territory of the other Party to:

2. When an importer in the territory of a Party claims preferential tariff treatment for a good imported into its territory from the territory of the other Party:

3. If a good would have qualified as originating when it was imported into the territory of a Party but a claim for preferential tariff treatment was not made at that time, the importing Party shall permit the importer of the good, within 4 years after the date the good was imported, to apply for a refund of any excess duties paid because the good was not accorded preferential tariff treatment. The importer applying for a refund must submit:

Article 5.4: Exceptions

A Party shall not require a Certificate of Origin for:

Article 5.5: Obligations regarding Exportations

1. Each Party shall provide that:

2. A Party may apply a measure that the circumstances warrant if an exporter or a producer in its territory fails to comply with a requirement of this Chapter.

3. A Party may not impose penalties on an exporter or a producer in its territory that voluntarily provides written notification pursuant to paragraph (1)(b) for an incorrect Certificate of Origin.

Section C – Administration and Enforcement

Article 5.6: Records

1. Each Party shall provide that an exporter or a producer in its territory that completes and signs a Certificate of Origin must maintain in its territory for 5 years after the date on which the Certificate of Origin was signed, or for a longer period specified by the Parties, records relating to the origin of a good for which preferential tariff treatment was claimed in the territory of the other Party, including records associated with:

2. Each Party shall provide that an importer claiming preferential tariff treatment for a good imported into the Party’s territory must maintain in its territory documentation relating to the importation of the good, including a copy of the Certificate of Origin, for 5 years after the date of importation of the good or for a longer period specified by the Party.

Article 5.7: Origin Verifications

1. For the purposes of determining whether a good imported into its territory from the territory of the other Party qualifies as originating, a Party may, through its competent authority, conduct a verification by means of:

2. Each Party shall allow an exporter or producer who receives a questionnaire pursuant to paragraph 1(a) at least 30 days, and no more than 60 days, from the date of receipt to return the completed questionnaire. On written request by the exporter or producer made during that period, the importing Party may grant the exporter or producer a single extension of the deadline of no more than:

3. If an exporter or producer fails to provide a properly completed questionnaire within the period or extension set out in paragraph 2, the importing Party may deny preferential tariff treatment to the good in question.

4. Before conducting a verification visit under paragraph 1(b), a Party shall, through its competent authority:

5. The notification referred to in paragraph 4 must include:

6. If an exporter or producer has not given its consent, in writing, to a proposed verification visit within 30 days of receipt of a notification under paragraph 4, the notifying Party may deny preferential tariff treatment to the good that was the subject of the visit.

7. The Party whose competent authority receives a notification under paragraph 4 may, within 15 days of receipt of the notification, postpone the proposed verification visit for up to 60 days from the date of that receipt or for a longer period that the Parties may decide.

8. Each Party shall allow an exporter or producer that receives notification under paragraph 4 to, on a single occasion within 15 days of receipt of the notification, request in writing that the postponement of the proposed verification visit for no more than:

9. A Party may not deny preferential tariff treatment to a good based only on the postponement of a verification visit under paragraphs 7 or 8.

10. A Party shall permit an exporter or a producer of a good that is the subject of a verification visit by the other Party to designate 2 observers to be present during the visit, provided that:

11. When a Party conducts a verification of origin involving a regional value content, de minimis calculation or any other provision in Chapter Four (Rules of Origin) to which Generally Accepted Accounting Principles may be relevant, it shall apply those principles as they apply in the territory of the Party from which the good was exported.

12. When a Party conducts a verification of origin, it shall, within 120 days after it receives the necessary information, provide the exporter or producer of the good that is the subject of the verification with a written determination of whether the good is originating, including findings of fact and the legal basis for the determination. A Party may extend that period by up to 90 days by providing a notification of extension to the exporter or producer.

13. If a verification by a Party indicates a pattern of conduct by an exporter or a producer of false or unsupported representations that a good imported into its territory qualifies as originating, the Party may withhold preferential tariff treatment to identical goods exported or produced by that person until that person establishes compliance with Chapter Four (Rules of Origin).

14. Each Party shall provide that if it determines that a certain good imported into its territory does not qualify as an originating good based on a tariff classification or a value applied by the Party to a material used in the production of the good, which differs from the tariff classification or value applied to the material by the other Party, the Party’s determination does not become effective until it notifies in writing both the importer of the good and the person that completed and signed the Certificate of Origin for the good of its determination.

15. A Party shall not apply a determination made under paragraph 14 to an importation made before the effective date of the determination if:

16. If a Party denies preferential tariff treatment to a good pursuant to a determination made under paragraph 14, it shall postpone the effective date of the denial for a period not exceeding 90 days if the importer of the good, or the person who completed and signed the Certificate of Origin for the good, demonstrates that it has relied in good faith to its detriment on the tariff classification or value applied to that material by the customs administration of the other Party.

Article 5.8: Confidentiality

1. Each Party shall maintain, in accordance with its domestic law, the confidentiality of the information collected under this Chapter and shall protect that information from disclosure that could prejudice the competitive position of the person providing the information. If the Party receiving or obtaining the information is required by its domestic law to disclose the information, that Party shall notify the person or Party who provided that information.

2. Subject to paragraph 3, each Party shall ensure that the confidential information collected under this Chapter is not used for purposes other than the administration and enforcement of determinations of origin and for customs matters, except with the authorization of the person or Party who provided the confidential information.

3. A Party may allow information collected under this Chapter to be used in an administrative, judicial, or quasi-judicial proceedings instituted for failure to comply with customs related laws and regulations implementing Chapter Four (Rules of Origin) and this Chapter. A Party shall notify the person or Party who provided the information in advance of that use.

Article 5.9: Penalties

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

2. Articles 5.3(2), 5.5(3) or 5.7(9) do not prevent a Party from applying measures that are warranted by the circumstances, in accordance with its domestic law.

Section D – Advance Rulings

Article 5.10: Advance Rulings

1. Each Party shall, through its competent authority, provide for the expeditious issuance of written advance rulings, prior to the importation of a good into its territory, to an importer in its territory or an exporter or a producer in the territory of the other Party, on the basis of the facts and circumstances presented by that importer, exporter, or producer of the good, concerning:

2. Each Party shall adopt or maintain procedures for the issuance of advance rulings, including a detailed description of the information reasonably required to process an application for a ruling.

3. Each Party shall provide that its competent authority:

4. Subject to paragraph 6, each Party shall apply an advance ruling to importations into its territory of the good for which the ruling was requested, beginning either on the date of its issuance or a later date specified in the ruling.

5. Each Party shall provide to a person requesting an advance ruling the same treatment, including the same interpretation and application of provisions of Chapter Four (Rules of Origin) regarding a determination of origin, as it provides to any other person to whom it issued an advance ruling, provided that the facts and circumstances are identical in all material respects.

6. The issuing Party may modify or revoke an advance ruling:

7. Each Party shall provide that a modification or revocation of an advance ruling:

8. Notwithstanding paragraph 7, the issuing Party shall postpone the effective date of the modification or revocation for up to 90 days if the person to whom the advance ruling was issued demonstrates that it has relied in good faith on that ruling to that person’s detriment.

9. Each Party shall provide that, if its competent authority examines the regional value content of a good for which it has issued an advance ruling pursuant to paragraph 1(b), (c), (d) or (e), the competent authority shall evaluate whether:

10. If a Party’s competent authority determines that a requirement in paragraph 9 has not been satisfied, the Party may modify or revoke the advance ruling if the circumstances warrant.

11. Each Party shall provide that, if the person to whom an advance ruling was issued demonstrates that it used reasonable care and acted in good faith in presenting the facts and circumstances on which the ruling was based, and if the competent authority of a Party determines that the ruling was based on incorrect information, the person to whom the ruling was issued is not subject to penalties.

12. If a Party issues an advance ruling to a person that has misrepresented or omitted the material facts or circumstances on which the ruling is based, or has failed to act in accordance with the terms and conditions of the ruling, the Party may apply the measures that are warranted by the circumstances, inaccordance with its domestic law.

13. Each Party shall provide that an advance ruling will remain in effect and will be honoured if there is no change in the material facts or circumstances on which it is based.

14. A Party may decline or postpone the issuance of an advance ruling if the application involves an issue that is the subject of:

Section E – Review and Appeal of Advance Rulings and Origin Determinations

Article 5.11: Review and Appeal

1. Each Party shall grant substantially the same rights of review and appeal of determinations of origin and advance rulings issued by its competent authority as it provides to importers in its territory, to a person who:

2. Further to Articles 20.5 (Transparency – Administrative Proceedings) and 20.6 (Transparency – Review and Appeal), each Party shall provide that the rights of review and appeal referred to in paragraph 1 shall include access to:

Section F – Uniform Regulations

Article 5.12: Uniform Regulations

1. The Parties shall establish and implement, through their respective laws, regulations or administrative policies Uniform Regulations regarding the interpretation, application and administration of this Chapter, or other matters decided by the Parties.

2. Each Party shall implement any modification of or addition to the Uniform Regulations within the period that the Parties decide.

Section G – Cooperation

Article 5.13: Cooperation

1. A Party shall notify the other Party of the following determinations, measures, and rulings:

2. The Parties shall cooperate:

3. For purposes of this Article, the Parties may enter into a Customs Mutual Assistance Agreement between their customs administrations.

Article 5.14: The Customs Procedures Sub-Committee

1. The Parties hereby establish a Customs Procedures Sub-Committee, composed of representatives of the competent authorities or customs administrations of each Party. The Sub-Committee shall meet periodically at the request of a Party and shall:

2. This Agreement does not prevent a Party from issuing a determination of origin or an advance ruling relating to a matter under consideration by the Customs Procedures Sub-Committee or from taking any other action it considers necessary, pending a resolution of the matter under this Agreement.

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