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Canada-Korea Free Trade Agreement

Chapter Four: Origin Procedures and Trade Facilitation

Section A – Certification of Origin

Article 4.1: Certificate of Origin

1. The Parties shall establish, by the date of entry into force of this Agreement, a Certificate of Origin to certify that a good exported from the territory of a Party into the territory of the other Party qualifies as an originating good. This Certificate of Origin may be modified as agreed by the Parties.

2. Each Party mayrequire that a Certificate of Origin for a good imported into its territory is completed in, or translated into, a language required under its domestic law.Footnote 1

3. Each Party shall:

4. Paragraph 3 is not to be construed to require a producer to provide a Certificate of Origin to an exporter.

5. Each Party shall provide that a Certificate of Origin duly completed and signed by an exporter or a producer in the territory of the other Party is applicable to:

6. The Certificate of Origin referred to in paragraph 3 shall be accepted as proof of origin for at least two years, or for a longer period as specified by the importing Party's laws and regulations, after the date on which the Certificate of Origin was signed.

7. Each Party shall accept a Certificate of Origin that has been completed and signed prior to the date of entry into force of this Agreement by the exporter or producer of an originating good imported into the territory of a Party on or after the date of entry into force of this Agreement.

Article 4.2: Obligations Regarding Importations

1. Except as 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. Each Party shall provide that, if an importer in its territory claims preferential tariff treatment for a good imported into its territory from the territory of the other Party:

3. Each Party shall, in accordance with its domestic law, provide that where a good would have qualified as an originating good when it was imported into the territory of that Party, the importer of the good may, within a period of at least one year or for a longer period specified by the importing Party's domestic law after the date on which the good was imported, apply for a refund of any excess duties paid as the result of the good not having been accorded preferential tariff treatment.

Article 4.3: Waiver of Certificate of Origin

Each Party shall provide that a Certificate of Origin is not required for:

Article 4.4: Obligations Regarding Exportations

1. Each Party shall provide that:

2. Each Party:

3. A Party shall not impose penalties on an exporter or a producer in its territory that voluntarily provides written notification pursuant to paragraph 1(b) with respect to the making of an incorrect certification.

Section B – Administration and Enforcement

Article 4.5: Record Keeping Requirements

Each Party shall provide that:

Article 4.6: Origin Verifications

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

2. Before conducting a verification visit pursuant to paragraph 1 (b), the Party shall, through its customs administration:

3. The notification referred to in paragraph 2 must include:

4. If an exporter or a producer has not given its written consent to a proposed verification visit within 30 days of receipt of notification under paragraph 2, the customs administration of the notifying Party may deny preferential tariff treatment to the good that would have been the subject of the visit.

5. Each Party shall provide that, on receipt of a notification under paragraph 2, an exporter or a producer may, within 15 days of receiving the notification, have one opportunity to make a request for a postponement of the proposed verification visit, for a period not exceeding 60 days, to the Party conducting the verification.

6. Each Party shall provide that, where its customs administration receives notification under paragraph 2, the customs administration may, within 15 days of receipt of the notification, postpone the proposed verification visit for a period not exceeding 60 days from the date of such receipt, or for such longer period as the Parties may agree.

7. A Party shall not deny preferential tariff treatment to a good based only on the postponement of a verification visit under paragraphs 5 and 6.

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

9. A Party shall, through its customs administration, when conducting a verification of origin involving a value test, de minimis calculation or any other provision in Chapter Three (Rules of Origin), apply those provisions in compliance with the Customs Valuation Agreement, as applicable in the territory of the Party from which the good was exported.

10. The Party conducting the verification shall provide the exporter or producer of the good that is the subject of the verification with a written determination of whether the good qualifies as an originating good, including findings of fact and the legal basis for the determination.

11. If verifications by a Party indicate a pattern of conduct by an exporter or a producer of false or unsupported representations that a good imported into its territory qualifies as an originating good, the Party may withhold preferential tariff treatment to identical goods exported or produced by that person until that person establishes compliance with Chapter Three (Rules of Origin), in accordance with that Party's domestic law.

Article 4.7: Denial of Preferential Tariff Treatment

Except as provided in this Chapter, the importing Party may deny a claim for preferential tariff treatment or recover unpaid customs duties in accordance with its domestic law, if the good does not meet the requirements of Chapter Three (Rules of Origin), or if the importer, exporter, or producer fails to comply with any of the relevant requirements of this Chapter.

Article 4.8: 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 persons providing the information. If the Party receiving the information is required by its domestic law to disclose information, that Party shall notify the Party or person who provided that information.

2. The confidential information collected under this Chapter shall not be used for purposes other than the administration and enforcement of determinations of origin, and of customs matters, except with the permission of the person or Party that provided the confidential information.

3. Notwithstanding paragraph 2, information that is obtained may be used in an administrative, judicial, or quasi-judicial proceedings instituted for failure to comply with customs related laws and regulations implementing Chapter Three (Rules of Origin) and this Chapter. The person or Party that provided the information will be notified in advance of such use.

Article 4.9: 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 4.2.2, 4.4.3, and 4.6.7 are not to be construed to prevent a Party from applying measures that are warranted by the circumstances in accordance with its domestic law.

Section C – Advance Rulings

Article 4.10: Advance Rulings

1. Each Party shall, through its customs administration, 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 customs administration:

4. Each Party may provide that the customs administration may decline or postpone the issuance of the advance ruling, if an application for an advance ruling involves an issue that is the subject of:

5. Subject to paragraph 7, each Party shall apply an advance ruling to importations into its territory of the good for which the ruling was requested, beginning on the date of its issuance or a later date as may be specified in the ruling.

6. Each Party shall provide consistent treatment with respect to the application for advance rulings provided that the facts and circumstances are identical in all material respects.

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

8. Each Party shall provide that a modification or revocation of an advance ruling shall be effective on the date on which the modification or revocation is issued, or on a later date as may be specified in the ruling, and shall not be applied to importations of a good that have occurred prior to that date, unless the person to which the advance ruling was issued has not acted in accordance with its terms and conditions.

9. Notwithstanding paragraph 8, the issuing Party shall postpone the effective date of the modification or revocation for a period not exceeding 90 days if the person to which the advance ruling was issued demonstrates that it has relied in good faith on that ruling to its detriment.

10. Each Party shall provide that, if its customs administration examines the value test of a good for which it has issued an advance ruling, the customs administration shall evaluate whether:

11. Each Party shall provide that, if its customs administration determines that a requirement in paragraph 10 has not been satisfied, the Party may modify or revoke the advance ruling if the circumstances warrant.

12. Each Party shall provide that:

13. Each Party shall provide that if it issues an advance ruling to a person that has misrepresented or omitted 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, that Party may apply measures that are warranted by the circumstances, in accordance with its domestic law.

14. Each Party shall provide that an advance ruling remains in effect and will be honoured if there is no change in the material facts or circumstances on which it is based, in accordance with its domestic law.

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

Article 4.11: Review and Appeal

Each Party shall grant substantially the same rights of review and appeal of determinations of origin and advance rulings by its customs administration, as it provides to importers in its territory, to a person:

2. Further to Articles 19.3 (Administrative Proceedings) and 19.4 (Review and Appeal), each Party shall provide that the rights of review and appeal referred to in paragraph 1 include access to:

Section E – Uniform Regulations

Article 4.12: Uniform Regulations

1. The Parties shall establish and implement, through their respective laws, regulations, or administrative policies, by the date of entry into force of this Agreement, Uniform Regulations regarding the interpretation, application, and administration of this Chapter.

2. Each Party shall implement any modification of or addition to the Uniform Regulations within an amount of time as agreed by the Parties.

Section F – Cooperation

Article 4.13: Cooperation

1. Each Party shall, in an official language(s), of one of the Parties, notify the other Party of the following determinations, measures, and rulings, including, to the extent practicable, those that are prospective in application:

2. The Parties recognise that technical cooperation between the Partiesis fundamental to facilitating compliance with the obligations set forth in this Agreement and for reaching a greater degree of trade facilitation.

3. The Parties, through their customs administrations, agree to develop a technical cooperation program under such mutually agreed terms as to the scope, timing, and cost of cooperative measures in customs-related areas.

4. The Parties shall cooperate:

Article 4.14: Rules of Origin and Customs Committee

1. The Parties hereby establish a Rules of Origin and Customs Committee, composed of representatives of each Party, to consider any matter arising under this Chapter and Chapter Three (Rules of Origin).

2. The Committee shall meet at the request of either Party.

3. The operations of the Committee will include:

Section G – Trade Facilitation

Article 4.15: Objectives and Principles

1. With the objectives of facilitating trade under this Agreement and of cooperating in pursuing trade facilitation initiatives on a multilateral basis, each Party agrees to administer their import and export processes for goods traded under this Agreement on the basis that:

Article 4.16: Release of Goods

1. Each Party shall adopt or maintain simplified customs procedures for the efficient release of goods in order to facilitate trade between the Parties.

2. Pursuant to paragraph 1, each Party shall ensure that its customs administration or other competent authority adopt or maintain procedures that:

3. Each Party shall adopt or maintain procedures under which goods in need of emergency clearance may be released 24 hours a day, seven days a week, including holidays.

4. The Parties recognise that, for certain goods or under certain circumstances, such as goods subject to a quota or to health-related or public safety requirements, releasing the goods may require the submission of more extensive information, before, or at the time of arrival of the goods, to enable the authorities to examine the goods for release.

5. The Parties shall ensure that the requirements of their respective agencies related to the import and export of goods are coordinated to facilitate trade, regardless of whether these requirements are administered by an agency or on behalf of that agency by the customs administration. To further this objective, each Party shall take steps to harmonise the data requirements of its respective agencies with the objective of allowing importers and exporters to present all required data to one agency.

6. The Parties, through their customs administrations, shall establish means of consultation with their trade and business communities to promote greater cooperation and the exchange of electronic information.

Article 4.17: Automation

Each Party shall use information technology that expedites procedures for the release of goods and shall:

Article 4.18: Risk Management

The Parties shall facilitate and simplify the process and procedures for the release of low-risk goods, and shall improve controls on the release of high-risk goods. For these purposes, the Parties shall base their examination and release procedures and their post-entry verification procedures on risk assessment principles, rather than examining each and every shipment offered for entry in a comprehensive manner for compliance with all import requirements. This shall not preclude the Parties from conducting quality control and compliance reviews, which may require more extensive examinations.

Article 4.19: Express Shipments

Each Party shall adopt or maintain expedited customs procedures for express shipments while maintaining appropriate customs control and selection. These procedures shall:

Article 4.20: Transparency

1. Each Party shall promptly publish or otherwise make available, including through electronic means, all its legislation, regulations, and notices of an administrative nature relating to its requirements for imported or exported goods, such as general agency requirements and entry procedures, hours of operation, and points of contacts for information enquiries.

2. This Article does not require a Party to publish, or otherwise make available, law enforcement procedures and internal operational guidelines including those related to conducting risk assessment.

Section H – Definitions

Article 4.21: Definitions

For the purposes of this Chapter:

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

determination of origin means a determination as to whether a good qualifies as an originating good in accordance with Chapter Three(Rules of Origin);

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

express shipments means shipments falling under the WCO Guidelines for the Immediate Release of Consignments by Customs;

identical goods means goods that are the same in all respects, including physical characteristics, quality, and reputation, irrespective of minor differences in appearance that are not relevant to a determination of origin of those goods under Chapter Three (Rules of Origin);

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

indirect material has the same meaning as "indirect material" in Article 3.14 (Indirect Materials);

material means "material" as defined in Article 3.20 (Definitions);

net cost of a good means "net cost of a good" as defined in Article 3.20 (Definitions);

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

producer means "producer" as defined in Article 3.20 (Definitions);

production means "production" as defined in Article 3.20 (Definitions);

transaction value or ex-works price of the good means "transaction value or ex-works price of the good" as defined in Article 3.20 (Definitions);

Uniform Regulations means "Uniform Regulations" established under Article 4.12; and

value means value of a good or material for the purposes of calculating customs duties or for the purposes of applying Chapter Three (Rules of Origin).

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