The Government of the United States of America and the Government of the Republic of
Chile, resolved to:
STRENGTHEN the special bonds of friendship and cooperation between their nations;
CONTRIBUTE to the harmonious development and expansion of world trade and provide a catalyst to broader international cooperation;
CREATE an expanded and secure market for the goods and services produced in their territories;
AVOID distortions in their reciprocal trade;
ESTABLISH clear and mutually advantageous rules governing their trade;
ENSURE a predictable commercial framework for business planning and investment;
BUILD on their respective rights and obligations under the Marrakesh Agreement establishing the World Trade Organization and other multilateral and bilateral instruments of cooperation;
ENHANCE the competitiveness of their firms in global markets;
FOSTER creativity and innovation, and promote trade in goods and services that are the subject of intellectual property rights;
CREATE new employment opportunities and improve working conditions and living standards in their respective territories;
BUILD on their respective international commitments and strengthen their cooperation on labor matters;
PROTECT, enhance, and enforce basic workers’ rights;
IMPLEMENT this Agreement in a manner consistent with environmental protection and conservation;
PROMOTE sustainable development;
CONSERVE, protect, and improve the environment, including through managing natural resources in their respective territories and through multilateral environmental agreements to which they are both parties;
PRESERVE their flexibility to safeguard the public welfare; and
CONTRIBUTE to hemispheric integration and the fulfillment of the objectives of the Free Trade Area of the Americas;
Article 1.1: Establishment of a Free Trade Area
The Parties to this Agreement, consistent with Article XXIV of the General Agreement on Tariffs and Trade 1994 and Article V of the General Agreement on Trade in Services, hereby establish a free trade area.
Article 1.2: Objectives
1. The objectives of this Agreement, as elaborated more specifically through its principles and rules, including national treatment, most-favored-nation treatment, and transparency, are to:
2. The Parties shall interpret and apply the provisions of this Agreement in the light of its objectives set out in paragraph 1 and in accordance with applicable rules of international law.
Article 1.3: Relation to Other Agreements
The Parties affirm their existing rights and obligations with respect to each other under the WTO Agreement and other agreements to which both Parties are party.
Article 1.4: Extent of Obligations
The Parties shall ensure that all necessary measures are taken in order to give effect to the provisions of this Agreement, including their observance, except as otherwise provided in this Agreement, by state governments.
Article 2.1: Definitions of General Application
For purposes of this Agreement, unless otherwise specified:
central level of government means:
Commission means the Free Trade Commission established under Article 21.1 (The Free Trade Commission); covered investment means, with respect to a Party, an investment in its territory of an investor of the other Party in existence as of the date of entry into force of this Agreement or established, acquired, or expanded thereafter;
customs authority means the competent authority that is responsible under the law of a Party for the administration of customs laws and regulations; customs duty includes any customs or import duty and a charge of any kind imposed in connection with the importation of a good, including any form of surtax or surcharge in connection with such importation, but does not include any:
Customs Valuation Agreement means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement;
days means calendar days;
enterprise means any entity constituted or organized under applicable law, whether or not for profit, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, sole proprietorship, joint venture, or other association;
enterprise of a Party means an enterprise constituted or organized under the law of a Party;
existing means in effect on the date of entry into force of this Agreement;
GATS means the General Agreement on Trade in Services, which is part of the WTO Agreement;
GATT 1994 means the General Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement;
goods of a Party means domestic products as these are understood in the GATT 1994 or such goods as the Parties may agree, and includes originating goods of that Party. A good of a Party may include materials of other countries;
Harmonized System (HS) means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, and Chapter Notes, as adopted and implemented by the Parties in their respective tariff laws;
heading means the first four digits in the tariff classification number under the Harmonized System;
measure includes any law, regulation, procedure, requirement, or practice;
national means a natural person who has the nationality of a Party according to Annex 2.1 or a permanent resident of a Party;
originating means qualifying under the rules of origin set out in Chapter Four (Rules of Origin and Origin Procedures);
person means a natural person or an enterprise;
person of a Party means a national or an enterprise of a Party;
preferential tariff treatment means the duty rate applicable under this Agreement to an originating good;
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;
regional level of government means, for the United States, a state of the United States, the District of Columbia, or Puerto Rico. For Chile, as a unitary state, “regional level of government” is not applicable;
Safeguards Agreement means the Agreement on Safeguards, which is part of the WTO Agreement;
SPS Agreement means the Agreement on the Application of Sanitary and Phytosanitary Measures, which is part of the WTO Agreement;
state enterprise means an enterprise that is owned, or controlled through ownership interests, by a Party;
subheading means the first six digits in the tariff classification number under the Harmonized System;
TBT Agreement means the Agreement on Technical Barriers to Trade, which is part of the WTO Agreement;
territory means for a Party the territory of that Party as set out in Annex 2.1;
TRIPS Agreement means the Agreement on Trade-Related Aspects of Intellectual Property Rights, which is part of the WTO Agreement; and
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, done on April 15, 1994.
For purposes of this Agreement, unless otherwise specified:
natural person who has the nationality of a Party means:
National Treatment and Market Access for Goods
Article 3.1: Scope and Coverage
Except as otherwise provided, this Chapter applies to trade in goods of a Party.
Section A - National Treatment
Article 3.2: National Treatment
1. Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994, including its interpretative notes, and to this end Article III of GATT 1994, and its interpretative notes, are incorporated into and made part of this Agreement, mutatis mutandis.
2. The provisions of paragraph 1 regarding national treatment shall mean, with respect to a regional level of government, treatment no less favorable than the most favorable treatment that regional level of government accords to any like, directly competitive, or substitutable goods, as the case may be, of the Party of which it forms a part.1
3. Paragraphs 1 and 2 shall not apply to the
measures set out in Annex 3.2.
Section B - Tariff Elimination
Article 3.3: Tariff Elimination
1. Except as otherwise provided in this Agreement, neither Party may increase any existing customs duty, or adopt any customs duty, on an originating good.
2. Except as otherwise provided in this Agreement, each Party shall progressively eliminate its customs duties on originating goods in accordance with Annex 3.3.
3. The United States shall eliminate customs duties on any non-agricultural originating goods that, after the date of entry into force of this Agreement, are designated as articles eligible for duty-free treatment under the U.S. Generalized System of Preferences, effective from the date of such designation.
4. On the request of either Party, the Parties shall consult to consider accelerating the elimination of customs duties set out in their Schedules to Annex 3.3. An agreement between the Parties to accelerate the elimination of a customs duty on a good shall supercede any duty rate or staging category determined pursuant to their Schedules to Annex for such good when approved by each Party in accordance with Article 21.1(3)(b) (The Free Trade Commission) and its applicable legal procedures.
5. For greater certainty, a Party may:
Article 3.4: Used Goods
On entry into force of this Agreement, Chile shall cease applying the 50 percent surcharge established in the Regla General Complementaria N° 3 of Arancel Aduanero with respect to originating goods of the other Party that benefit from preferential tariff treatment.
Article 3.5: Customs Valuation of Carrier Media
1. For purposes of determining the customs value of carrier media bearing content, each Party shall base its determination on the cost or value of the carrier media alone.
2. For purposes of the effective imposition of any internal taxes, direct or indirect, each Party shall determine the tax basis according to its domestic law.
Section C - Special Regimes
Article 3.6: Waiver of Customs Duties
1. Neither Party may adopt any new waiver of customs duties, or expand with respect to existing recipients or extend to any new recipient the application of an existing waiver of customs duties, where the waiver is conditioned, explicitly or implicitly, on the fulfillment of a performance requirement.
2. Neither Party may, explicitly or implicitly, condition on the fulfillment of a performance requirement the continuation of any existing waiver of customs duties.
3. This Article shall not apply to measures subject to Article 3.8.
Article 3.7: Temporary Admission of Goods
1. Each Party shall grant duty-free temporary admission for:
2. Each Party shall, at the request of the person concerned and for reasons deemed valid by its customs authority, extend the time limit for temporary admission beyond the period initially fixed.
3. Neither Party may condition the duty-free temporary admission of goods referred to in paragraph 1, other than to require that such goods:
4. If any condition that a Party imposes under paragraph 3 has not been fulfilled, the Party may apply the customs duty and any other charge that would normally be owed on the good plus any other charges or penalities provided for under its domestic law.
5. Each Party, through its customs authority, shall adopt procedures providing for the expeditious release of goods admitted under this Article. To the extent possible, such procedures shall provide that when such a good accompanies a national or resident of the other Party who is seeking temporary entry, the good shall be released simultaneously with the entry of that national or resident.
6. Each Party shall permit a good temporarily admitted under this Article to be exported through a customs port other than that through which it was admitted.
7. Each Party, through its customs authority, consistent with domestic law, shall relieve the importer or other person responsible for a good admitted under this Article from any liability for failure to export the good on presentation of satisfactory proof to customs authorities that the good has been destroyed within the original period fixed for temporary admission or any lawful extension.
8. Subject to Chapters Ten (Investment) and Eleven (Cross-Border Trade in Services):
9. For purposes of paragraph 8, vehicle means a truck, a truck tractor, tractor, trailer unit or trailer, a locomotive, or a railway car or other railroad equipment.
Article 3.8: Drawback and Duty Deferral Programs
1. Except as otherwise provided in this Article, neither Party may refund the amount of customs duties paid, or waive or reduce the amount of customs duties owed, on a good imported into its territory, on condition that the good is:
2. Neither Party may, on condition of export, refund, waive, or reduce:
3. Where a good is imported into the territory of a Party pursuant to a duty deferral program and is subsequently exported to the territory of the other Party, or is used as a material in the production of another good that is subsequently exported to the territory of the other Party, or is substituted by an identical or similar good used as a material in the production of another good that is subsequently exported to the territory of the other Party, the Party from whose territory the good is exported shall assess the customs duties as if the exported good had been withdrawn for domestic consumption.
4. This Article does not apply to:
5. This Article shall take effect beginning eight years after the date of entry into force of this Agreement, and thereafter a Party may refund, waive, or reduce duties paid or owed under the Party’s duty drawback or deferral programs according to the following schedule:
6. For purposes of this Article:
good means “good” as defined in Article 4.18 (Definitions);
identical or similar goods means “identical goods” and “similar goods”, respectively, as defined in the Customs Valuation Agreement;
material means “material” as defined in Article 4.18 (Definitions); and
used means used or consumed in the production of goods.
Article 3.9: Goods Re-entered after Repair or Alteration
1. Neither Party may apply a customs duty to a good, regardless of its origin, that reenters its territory after that good has been temporarily exported from its territory to the territory of the other Party for repair or alteration, regardless of whether such repair or alteration could be performed in its territory.
2. Neither Party may apply a customs duty to a good, regardless of its origin, admitted temporarily from the territory of the other Party for repair or alteration.
3. For purposes of this Article, repair or alteration does not include an operation or process that:
Article 3.10: Duty-Free Entry of Commercial Samples of Negligible Value and Printed Advertising Materials
Each Party shall grant duty-free entry to commercial samples of negligible value, and to printed advertising materials, imported from the territory of the other Party, regardless of their origin, but may require that:
Section D - Non-Tariff Measures
Article 3.11: Import and Export Restrictions
1. Except as otherwise provided in this Agreement, neither Party may adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, except in accordance with Article XI of GATT 1994 and its interpretative notes and to this end Article XI of GATT 1994 and its interpretative notes are incorporated into and made a part of this Agreement, mutatis mutandis.
2. The Parties understand that the GATT rights and obligations incorporated by paragraph 1 prohibit, in any circumstances in which any other form of restriction is prohibited, a Party from adopting or maintaining:
3. In the event that a Party adopts or maintains a prohibition or restriction on the importation from or exportation to a non-Party of a good, nothing in this Agreement shall be construed to prevent the Party from:
4. In the event that a Party adopts or maintains a prohibition or restriction on the importation of a good from a non-Party, the Parties, on the request of either Party, shall consult with a view to avoiding undue interference with or distortion of pricing, marketing, and distribution arrangements in the other Party.
5. Paragraphs 1 through 4 shall not apply to the measures set out in Annex 3.2.
Article 3.12: Administrative Fees and Formalities
1. Each Party shall ensure, in accordance with Article VIII:1 of GATT 1994 and its interpretive notes, that all fees and charges of whatever character (other than customs duties, charges equivalent to an internal tax or other internal charge applied consistently with Article III:2 of GATT 1994, and antidumping and countervailing duties) imposed on or in connection with importation or exportation are limited in amount to the approximate cost of services rendered and do not represent an indirect protection to domestic goods or a taxation of imports or exports for fiscal purposes.
2. Neither Party may require consular transactions, including related fees and charges, in connection with the importation of any good of the other Party.
3. Each Party shall make available through the Internet or a comparable computer based telecommunications network a current list of the fees and charges it imposes in connection with importation or exportation.
4. The United States shall eliminate its merchandise processing fee on originating goods of Chile.
Article 3.13: Export Taxes
Neither Party may adopt or maintain any duty, tax, or other charge on the export of any good to the territory of the other Party, unless such duty, tax, or charge is adopted or maintained on any such good when destined for domestic consumption.
Article 3.14: Luxury Tax
Chile shall eliminate the Luxury Tax established in Article 46 of Decreto Ley 825 of 1974, according to the schedule set out in Annex 3.14.
Section E - Other Measures
Article 3.15: Distinctive Products
1. Chile shall recognize Bourbon Whiskey and Tennessee Whiskey, which is a straight Bourbon Whisky authorized to be produced only in the State of Tennessee, as distinctive products of the United States. Accordingly, Chile shall not permit the sale of any product as Bourbon Whiskey or Tennessee Whiskey, unless it has been manufactured in the United States in accordance with the laws and regulations of the United States governing the manufacture of Bourbon Whiskey and Tennessee Whiskey.
2. The United States shall recognize Pisco Chileno (Chilean Pisco), Pajarete, and Vino Asoleado, which is authorized in Chile to be produced only in Chile, as distinctive products of Chile. Accordingly, the United States shall not permit the sale of any product as Pisco Chileno (Chilean Pisco), Pajarete, or Vino Asoleado, unless it has been manufactured in Chile in accordance with the laws and regulations of Chile governing the manufacture of Pisco, Pajarete, and Vino Asoleado.
Section F - Agriculture
Article 3.16: Agricultural Export Subsidies
1. The Parties share the objective of the multilateral elimination of export subsidies for agricultural goods and shall work together toward an agreement in the World Trade Organization to eliminate those subsidies and prevent their reintroduction in any form.
2. Except as provided in paragraph 3, neither Party shall introduce or maintain any export subsidy on any agricultural good destined for the territory of the other Party.
3. Where an exporting Party considers that a non-Party is exporting an agricultural good to the territory of the other Party with the benefit of export subsidies, the importing Party shall, on written request of the exporting Party, consult with the exporting Party with a view to agreeing on specific measures that the importing Party may adopt to counter the effect of such subsidized imports. If the importing Party adopts the agreed-upon measures, the exporting Party shall refrain from applying any export subsidy to exports of such good to the territory of the importing Party.
Article 3.17: Agricultural Marketing and Grading Standards
1. Where a Party adopts or maintains a measure respecting the classification, grading, or marketing of a domestic agricultural good, or a measure to expand, maintain, or develop its domestic market for an agricultural good, it shall accord treatment to a like good of the other Party that is no less favorable than it accords under the measure to the domestic agricultural good, regardless of whether the good is intended for direct consumption or for processing.
2. Paragraph 1 shall be without prejudice to the rights of either Party under the WTO Agreement or under this Agreement regarding measures respecting the classification, grading, or marketing of an agricultural good.
3. The Parties hereby establish a Working Group on Agricultural Trade, comprising representatives of the Parties, which shall meet annually or as otherwise agreed. The Working Group shall review, in coordination with the Committee on Technical Barriers to Trade established in Article 7.8 (Committee on Technical Barriers to Trade), the operation of agricultural grade and quality standards and programs of expansion and development that affect trade between the Parties, and shall resolve any issues that may arise regarding the operation of those standards and programs. The Group shall report to the Committee on Trade in Goods established in Article 3.23.
4. Each Party shall recognize the other Party’s grading programs for beef, as set out in Annex 3.17.
Article 3.18: Agricultural Safeguard Measures
1. Notwithstanding Article 3.3(2), each Party may impose a safeguard measure in the form of additional import duties, consistent with paragraphs 2 through 7, on an originating agricultural good listed in its section of Annex 3.18. The sum of any such additional duty and any import duties or other charges applied pursuant to Article 3.3(2) shall not exceed the lesser of:
2. A Party may impose a safeguard measure only if the unit import price of the good enters the Party’s customs territory at a level below a trigger price for that good as set out in that Party’s section of Annex 3.18.
3. The additional duties under paragraph 2 shall be set in accordance with the following schedule:
4. Neither Party may, with respect to the same good, at the same time:
5. Neither Party may impose a safeguard measure on a good that is subject to a measure that the Party has imposed pursuant to Article XIX of GATT 1994 and the Safeguards Agreement, and neither Party may continue maintaining a safeguard measure on a good that becomes subject to a measure that the Party imposes pursuant to Article XIX of GATT 1994 and the Safeguards Agreement.
6. A Party may impose a safeguard measure only during the 12-year period beginning on the date of entry into force of this Agreement. Neither Party may impose a safeguard measure on a good once the good achieves duty-free status under this Agreement. Neither Party may impose a safeguard measure that increases a zero in-quota duty on a good subject to a tariff-rate quota.
7. Each Party shall implement any safeguard measure in a transparent manner. Within 60 days after imposing a measure, a Party shall notify the other Party, in writing, and shall provide it relevant data concerning the measure. On request, the Party imposing the measure shall consult with the other Party with respect to the conditions of application of the measure.
8. The general operation of the agricultural safeguard provisions and the trigger prices for their implementation may be the subject of discussion and review in the Committee on Trade in Goods.
9. For purposes of this Article, safeguard measure means an agricultural safeguard measure described in paragraph 1.
Section G - Textiles and Apparel
Article 3.19: Bilateral Emergency Actions
1. If, as a result of the elimination of a duty provided for in this Agreement, a textile or apparel good benefiting from preferential tariff treatment under this Agreement is being imported into the territory of a Party in such increased quantities, in absolute terms or relative to the domestic market for that good, and under such conditions as to cause serious damage, or actual threat thereof, to a domestic industry producing a like or directly competitive good, the importing Party may, to the extent and for such time as may be necessary to prevent or remedy such damage and to facilitate adjustment, take emergency action, consisting of an increase in the rate of duty on the good to a level not to exceed the lesser of:
2. In determining serious damage, or actual threat thereof, the importing Party:
3. The importing Party may take an emergency action under this Article only following an investigation by its competent authorities.
4. The importing Party shall deliver to the other Party, without delay, written notice of its intent to take emergency action, and, on request of the other Party, shall enter into consultations with that Party.
5. The following conditions and limitations shall apply to any emergency action taken under this Article:
6. The Party taking an emergency action under this Article shall provide to the Party against whose good the action is taken mutually agreed trade liberalizing compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the emergency action. Such concessions shall be limited to textile and apparel goods, unless the Parties otherwise agree. If the Parties are unable to agree on compensation, the Party against whose good the emergency action is taken may take tariff action having trade effects substantially equivalent to the trade effects of the emergency action taken under this Article. Such tariff action may be taken against any goods of the Party taking the emergency action. The Party taking the tariff action shall apply such action only for the minimum period necessary to achieve the substantially equivalent trade effects. The importing Party's obligation to provide trade compensation and the exporting Party's right to take tariff action shall terminate when the emergency action terminates.
7. Nothing in this Agreement shall be construed to limit a Party's right to restrain imports of textile and apparel goods in a manner consistent with the Agreement on Textiles and Clothing or the Safeguards Agreement. However, a Party may not take or maintain an emergency action under this Article against a textile or apparel good that is subject, or becomes subject, to a safeguard measure that a Party takes pursuant to either such WTO agreement.
Article 3.20: Rules of Origin and Related Matters
Application of Chapter Four
1. Except as provided in this Section, Chapter Four (Rules of Origin and Origin Procedures) applies to textile and apparel goods.
2. The rules of origin set forth in this Agreement shall not apply in determining the country of origin of a textile or apparel good for non-preferential purposes.
3. On the request of either Party, the Parties shall consult to consider whether the rules of origin applicable to particular textile and apparel goods should be revised to address issues of availability of supply of fibers, yarns or fabrics in the territories of the Parties.
4. In the consultations referred to in paragraph 3, each Party shall consider all data presented by the other Party showing substantial production in its territory of the particular good. The Parties shall consider that substantial production has been shown if a Party demonstrates that its domestic producers are capable of supplying commercial quantities of the good in a timely manner.
5. The Parties shall endeavor to conclude consultations within 60 days of a request. An agreement between the Parties resulting from the consultations shall supersede any prior rule of origin for such good when approved by the Parties in accordance with Article 24.2 (Amendments).
6. A textile or apparel good provided for in Chapters 50 through 63 of the Harmonized System that is not an originating good, because certain fibers or yarns used in the production of the component of the good that determines the tariff classification of the good do not undergo an applicable change in tariff classification set out in Annex 4.1 (Specific Rules of Origin), shall nonetheless be considered to be an originating good if the total weight of all such fibers or yarns in that component is not more than seven percent of the total weight of that component. Notwithstanding the preceding sentence, a good containing elastomeric yarns in the component of the good that determines the tariff classification of the good shall be considered to be an originating good only if such yarns are wholly formed in the territory of a Party.
Treatment of Sets
7. Notwithstanding the good specific rules in Annex 4.1 (Specific Rules of Origin), textile and apparel goods classifiable as goods put up in sets for retail sale as provided for in General Rule of Interpretation 3 of the Harmonized System shall not be regarded as originating goods unless each of the goods in the set is an originating good or the total value of the non-originating goods in the set does not exceed 10 percent of the customs value of the set.
Preferential Tariff Treatment for Non-Originating Cotton and Man-made Fiber Fabric Goods (Tariff Preference Levels)
8. Subject to paragraph 9, the following goods, if they meet the applicable conditions for preferential tariff treatment under this Agreement other than the condition that they be originating goods, shall be accorded preferential tariff treatment as if they were originating goods:
9. The treatment described in paragraph 8 shall be limited to goods imported into the territory of a Party up to an annual total quantity of 1,000,000 SME.
Preferential Tariff Treatment for Non-Originating Cotton and Man-made Fiber Apparel Goods (Tariff Preference Levels)
10. Subject to paragraph 11, cotton or man-made fiber apparel goods provided for in Chapters 61 and 62 of the Harmonized System that are both cut (or knit to shape) and sewn or otherwise assembled in the territory of a Party from fabric or yarn produced or obtained outside the territory of a Party, and that meet the applicable conditions for preferential tariff treatment under this Agreement other than the condition that they be originating goods, shall be accorded preferential tariff treatment as if they were originating goods.
11. The treatment described in paragraph 10 shall be limited as follows:
Certification for Tariff Preference Level
12. A Party, through its competent authorities, may require that an importer claiming preferential tariff treatment for a textile or apparel good under paragraph 8 or 10 present to such competent authorities at the time of importation a certification of eligibility for preferential tariff treatment under such paragraph. A certification of eligibility shall be prepared by the importer and shall consist of information demonstrating that the good satisfies the requirements for preferential tariff treatment under paragraph 8 or 10.
Article 3.21: Customs Cooperation
1. The Parties shall cooperate for purposes of:
2. On the request of the importing Party, the exporting Party shall conduct a verification for purposes of enabling the importing Party to determine that a claim of origin for a textile or apparel good is accurate. The exporting Party shall conduct such a verification, regardless of whether an importer claims preferential tariff treatment for the good. The exporting Party also may conduct such a verification on its own initiative.
3. Where the importing Party has a reasonable suspicion that an exporter or producer of the exporting Party is engaging in unlawful activity relating to trade in textile and apparel goods, the importing Party may request the exporting Party to conduct a verification for purposes of enabling the importing Party to determine that the exporter or producer is complying with applicable customs laws, regulations, and procedures regarding trade in textile and apparel goods, including laws, regulations, and procedures that the exporting Party adopts and maintains pursuant to this Agreement and laws, regulations, and procedures of either Party implementing other international agreements regarding trade in textile and apparel goods, and to determine that claims of origin regarding textile or apparel goods exported or produced by that person are accurate. For purposes of this paragraph, a reasonable suspicion of unlawful activity shall be based on factors including relevant factual information of the type set forth in Article 5.5 (Cooperation) or that, with respect to a particular shipment, indicates circumvention by the exporter or producer of applicable customs laws, regulations, or procedures regarding trade in textile and apparel goods, including laws, regulations, or procedures adopted to implement this Agreement, or international agreements affecting trade in textile and apparel goods.
4. The importing Party, through its competent authorities, may undertake or assist in a verification conducted pursuant to paragraph 2 or 3, including by conducting, along with the competent authorities of the exporting Party, visits in the territory of the exporting Party to the premises of an exporter, producer, or any other enterprise involved in the movement of textile or apparel goods from the territory of the exporting Party to the territory of the importing Party.
5. Each Party shall provide to the other Party, consistent with its laws, regulations, and procedures, production, trade, and transit documents and other information necessary to conduct verifications under paragraphs 2 and 3. Any documents or information exchanged between the Parties in the course of such a verification shall be considered confidential, as provided for in Article 5.6 (Confidentiality).
6. While a verification is being conducted, the importing Party may take appropriate action, which may include suspending the application of preferential tariff treatment to:
7. The Party conducting a verification under paragraph 2 or 3 shall provide the other Party with a written report on the results of the verification, which shall include all documents and facts supporting any conclusion that the Party reaches.
9. Prior to commencing appropriate action under paragraph 8, the importing Party shall notify the other Party. The importing Party may continue to take appropriate action under paragraph 8 until it receives information sufficient to enable it to make the determination described in paragraph 2 or 3, as the case may be.
10. Chile shall implement its obligations under paragraphs 2, 3, 6, 7, 8, and 9 no later than two years after the date of entry into force of this Agreement. Before Chile fully implements those provisions, if the importing Party requests a verification, the verification shall be conducted principally by that Party, including through means described in paragraph 4. Nothing in this paragraph shall be construed to waive or limit the importing Party's rights under paragraphs 6 and 8.
11. On the request of either Party, the Parties shall enter into consultations to resolve any technical or interpretive difficulties that may arise under this Article or to discuss ways to improve the effectiveness of their cooperative efforts. In addition, either Party may request technical or other assistance from the other Party in implementing this Article. The Party receiving such a request shall make every effort to respond favorably and promptly to it.
Article 3.22: Definitions
For purposes of this Section:
claim of origin means a claim that a textile or apparel good is an originating good or a good of a Party;
exporting Party means the Party from whose territory a textile or apparel good is exported;
importing Party means the Party into whose territory a textile or apparel good is imported;
SME means square meter equivalents, as calculated in accordance with the conversion factors set out in the Correlation: Textile and Apparel Categories with the Harmonized Tariff Schedule of the United States, 2002 (or successor publication), published by the United States Department of Commerce, International Trade Administration, Office of Textiles and Apparel, Trade and Data Division, Washington, D.C.; and
textile or apparel good means a good listed in the Annex to the Agreement on Textiles and Clothing.
Section H - Institutional Provisions
Article 3.23: Committee on Trade in Goods
1. The Parties hereby establish a Committee on Trade in Goods, comprising representatives of each Party.
2. The Committee shall meet on the request of either Party or the Commission to consider any matter arising under this Chapter, Chapter Four (Rules of Origin and Origin Procedures), or Chapter Five (Customs Administration).
3. The Committee’s functions shall include:
(a) promoting trade in goods between the Parties, including through consultations on accelerating tariff elimination under this Agreement and other issues as appropriate; and
(b) addressing barriers to trade in goods between the Parties, especially those related to the application of non-tariff measures, and, if appropriate, referring such matters to the Commission for its consideration.
Section I - Definitions
Article 3.24: Definitions
For purposes of this Chapter:
AD Agreement means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, which is part of the WTO Agreement;
advertising films and recordings means recorded visual media or audio materials, consisting essentially of ../images and/or sound, showing the nature or operation of goods or services offered for sale or lease by a person established or resident in the territory of a Party, provided that such materials are of a kind suitable for exhibition to prospective customers but not for broadcast to the general public, and provided that they are imported in packets that each contain no more than one copy of each film or recording and that do not form part of a larger consignment.
Agreement on Textiles and Clothing means the Agreement on Textiles and Clothing, which is part of the WTO Agreement;
agricultural goods means those goods referred to in Article 2 of the Agreement on Agriculture, which is part of the WTO Agreement;
articles eligible for duty-free treatment under the U.S. Generalized System of Preferences does not include articles eligible only when imported from least-developed beneficiary developing countries or from beneficiary sub-Saharan African countries under the African Growth and Opportunity Act;
carrier media means any good of heading 8523 or 8524;
commercial samples of negligible value means commercial samples having a value, individually or in the aggregate as shipped, of not more than one U.S. dollar, or the equivalent amount in Chilean currency, or so marked, torn, perforated, or otherwise treated that they are unsuitable for sale or for use except as commercial samples;
consular transactions means requirements that goods of a Party intended for export to the territory of the other Party must first be submitted to the supervision of the consul of the importing Party in the territory of the exporting Party for the purpose of obtaining consular invoices or consular visas for commercial invoices, certificates of origin, manifests, shippers’ export declarations, or any other customs documentation required on or in connection with importation;
duty-free means free of customs duty;
duty deferral program includes measures such as those governing foreign-trade zones, regímenes de zonas francas y regímenes aduaneros especiales, temporary importations under bond, bonded warehouses, and inward processing programs;
export subsidies shall have the meaning assigned to that term in Article 1(e) of the WTO Agreement on Agriculture, including any amendment of that article;
goods intended for display or demonstration includes their component parts, ancillary apparatus, and accessories;
goods temporarily admitted for sports purposes means sports requisites for use in sports contests, demonstrations, or training in the territory of the Party into whose territory such goods are admitted;
import licensing means an administrative procedures requiring the submission of an application or other documentation (other than that generally required for customs clearance purposes) to the relevant administrative body as a prior condition for importation into the territory of the importing Party;
performance requirement means a requirement that:
printed advertising materials means those goods classified in Chapter 49 of the Harmonized System, including brochures, pamphlets, leaflets, trade catalogues, yearbooks published by trade associations, tourist promotional materials, and posters, that are used to promote, publicize, or advertise a good or service, are essentially intended to advertise a good or service, and are supplied free of charge; and
SCM Agreement means the Agreement on Subsidies and Countervailing Measures, which is part of the WTO Agreement.
National Treatment and Import and Export Restrictions
Section A - Measures of the United States
Article 3.2 and Article 3.11 shall not apply to:
Section B - Measures of Chile
1. Article 3.2 and Article 3.11 shall not apply to actions by Chile authorized by the Dispute Settlement Body of the WTO.
2. Article 3.11 shall not apply to measures of Chile relating to imports of used vehicles.
1. Except as otherwise provided in a Party's Schedule attached to this Annex, the following staging categories apply to the elimination of customs duties by each Party pursuant to Article 3.3(2):
2. The base rate of customs duty and staging category for determining the interim rate of customs duty at each stage of reduction for an item are indicated for the item in each Party’s Schedule attached to this Annex.
3. For the purpose of the elimination of customs duties in accordance with Article 3.3, interim staged rates shall be rounded down, at least to the nearest tenth of a percentage point or, if the rate of duty is expressed in monetary units, at least to the nearest 0.001 of the official monetary unit of the Party.
1. Chile shall eliminate the Luxury Tax established in Article 46 of Decreto Ley 825 of 1974 according to the following schedule:
2. Upon the date of entry into force of this Agreement, Chile shall increase the threshold at which the tax is applied to US$2,500 above the level provided for that year under Article 46 of Decreto Ley 825, and increase the threshold each subsequent year by an additional US$2,500 until the tax is eliminated.
Mutual Recognition of Grading
Further to Article 3.17(4), this Annex sets out commitments of each Party to recognize the other Party’s grading programs for beef.
Background on the Chilean and U.S. Grading Programs
The Official Chilean “Norms” for grading beef (Norma Chilena 1306-2002) provide for five categories (V, C, U, N, and O) that differentiate the beef carcass population based on a combination of yield and palatability characteristics. Those characteristics include sex class, maturity as determined by dentition, and a subjective overall fat covering score. The “V” and “C” classifications are perceived as highest in “value,” while the “U” and “N” classifications are considered the lowest in “value.” The “O” classification applies only to calves. Bulls in Chile are only eligible for the “U” and “N” categories.
The Official United States Standards for Grades of Carcass Beef outline two distinct types of beef grades for use in the United States – quality grades and yield grades. Beef carcasses may carry a quality grade, a yield grade, both a quality and a yield grade, or may be left ungraded. USDA quality grades indicate expected palatability or eating satisfaction of the meat and USDA yield grades are estimates of the percentage of a carcass that yields boneless, closely trimmed retail cuts from the round, loin, rib and chuck.
USDA beef quality grades are USDA Prime, USDA Choice, USDA Select, USDA Standard, USDA Commercial, USDA Utility, USDA Cutter, and USDA Canner. Beef steers and heifers are eligible for all the quality grade designations. Cows are eligible for all but the USDA Prime grade. Bullocks may only be graded USDA Prime, USDA Choice, USDA Select, USDA Standard, and USDA Utility. Bulls may not be quality graded.
Because grading is voluntary in the United States, not all carcasses are quality graded. Beef products merchandised as ungraded in the United States usually originate from those carcasses that did not qualify for one of the highest three grades (USDA Prime, USDA Choice, and USDA Select). The U.S. industry generally terms ungraded beef carcasses and their resulting cuts as "No Roll" beef, because a grade stamp has not been rolled on the carcass. For the USDA quality grade standards, maturity and marbling are the major considerations in beef quality grading.
Because most beef that packers market in the United States is not in carcass form, but instead is in the form of vacuum packaged subprimal cuts, only the quality grade is routinely used as a value determining trait in the marketing of beef products in the United States and ultimately passed on to the consumer. Accordingly, Article 3.17 and this Annex do not apply to USDA yield grades.
Commitments Regarding Mutual Recognition of the Chilean and U.S. Grading Programs
The Parties confirm their shared understanding that:
1. Chile acknowledges that USDA’s Agricultural Marketing Service (AMS) is a competent entity of grading quality, certifying all materials referred to in Article No. 5 of Regulation No. 19.162, with respect to meats exported to Chile from the United States.
2. The United States recognizes the competency of certification entities inscribed in the Registro de Certificadores de Carne division of the Servicio Agrícola y Ganadero of Chile (SAG) to certify Chilean meats destined toward that market.
3. AMS and SAG shall recognize each other’s respective beef grading systems for the purposes of:
4. The comparative beef cut nomenclature table set out in Appendix 3.17-A shall serve as a reference for the labeling of beef traded between the two markets under the terms of Article 3.17 and this Annex.
5. The standards of grading systems employed by Chile and the United States are described in Appendix 3.17-B. The Parties may modify Appendix 3.17-B by means of exchanges of letters between the USDA, AMS and the SAG. Furthermore, by means of written communications, the USDA, AMS, and the SAG may institute and modify standards of Chilean meat cuts and North American meat cuts.
6. USDA graded beef (e.g., USDA Prime, USDA Choice, and USDA Select) produced in the United States may be exported to Chile provided that a label indicates its Chilean equivalent and its country of origin.
7. Beef produced in Chile may be exported to the United States provided that the label or sticker indicates the applicable Chilean norm and country of origin.
8. AMS and SAG shall work cooperatively to assist the beef industries of the United States and Chile in following these procedures.
Comparative Beef Cut Nomenclature Table / Equivalencia De Cortes
Comparison of Chilean Beef Norms
Product Lists and Trigger Prices for Agricultural Safeguard
Rules of Origin and Origin Procedures
Section A - Rules of Origin
Article 4.1: Originating Goods
1. Except as otherwise provided in this Chapter, a good is originating where:
2. A good shall not be considered to be an originating good and a material shall not be considered to be an originating material by virtue of having undergone:
Article 4.2: Regional Value Content
1. Where Annex 4.1 specifies a regional value content test to determine whether a good is originating, each Party shall provide that the person claiming preferential tariff treatment for the good may calculate regional value content on the basis of one or the other of the following methods:
VOM x 100
Article 4.3: Value of Materials
1. Each Party shall provide that for purposes of calculating the regional value content of a good, and for purposes of applying the de minimis rule, the value of a material:
2. Each Party shall provide that the person claiming preferential tariff treatment for a good may adjust the value of materials as follows:
Article 4.4: Accessories, Spare Parts, and Tools
Each Party shall provide that accessories, spare parts, or tools delivered with a good that form part of the good’s standard accessories, spare parts, or tools, shall be regarded as a material used in the production of the good, provided that:
Article 4.5: Fungible Goods and Materials
1. Each Party shall provide that the person claiming preferential tariff treatment for a good may claim that a fungible good or material is originating based on either the physical segregation of each fungible good or material, or through the use of any inventory management method, such as averaging, last-in, first-out, or first-in, first-out, recognized in the Generally Accepted Accounting Principles of the Party in which the production is performed or otherwise accepted by the Party in which the production is performed.
2. Each Party shall provide that the inventory management method selected under paragraph 1 for particular fungible goods or materials shall continue to be used for those goods or materials throughout the fiscal year of the person that selected the inventory management method.
Article 4.6: Accumulation
1. Each Party shall provide that originating goods or materials of a Party, incorporated into a good in the territory of the other Party, shall be considered to originate in the territory of the other Party.
2. Each Party shall provide that a good is originating where the good is produced in the territory of one or both Parties by one or more producers, provided that the good satisfies the requirements in Article 4.1 and all other applicable requirements in this Chapter.
Article 4.7: De Minimis Rule
1. Each Party shall provide that a good that does not undergo a change in tariff classification pursuant to Annex 4.1 is nonetheless originating if the value of all nonoriginating materials that are used in the production of the good and that do not undergo the applicable change in tariff classification does not exceed 10 percent of the adjusted value of the good, provided that the value of such non-originating materials shall be included in the value of non-originating materials for any applicable regional value content requirement and that the good meets all other applicable requirements in this Chapter.
2. Paragraph 1 does not apply to:
3. With respect to a textile and apparel good provided for in Chapters 50 through 63 of the Harmonized System, Article 3.20(6) (Rules of Origin and Related Matters) applies in place of paragraph 1.
Article 4.8: Indirect Materials Used in Production
Each Party shall provide that an indirect material shall be considered to be an originating material without regard to where it is produced.
Article 4.9: Packaging Materials and Containers for Retail Sale
Each Party shall provide that packaging materials and containers in which a good is packaged for retail sale, if classified with the good, shall be disregarded in determining whether all non-originating materials used in the production of the good undergo the applicable change in tariff classification set out in Annex 4.1, and, if the good is subject to a regional value content requirement, the value of such packaging materials and containers shall be taken into account as originating or non-originating materials, as the case may be, in calculating the regional value content of the good.
Article 4.10: Packing Materials and Containers for Shipment
Each Party shall provide that packing materials and containers for shipment shall be disregarded in determining whether:
Article 4.11: Transit and Transshipment
1. Each Party shall provide that a good shall not be considered an originating good if the good undergoes subsequent production or any other operation outside the territories of the Parties, other than unloading, reloading, or any other process necessary to preserve the good in good condition or to transport the good to the territory of a Party.
2. The importing Party may require that a person claiming that a good is originating demonstrate, to the satisfaction of the Party’s customs authority, that any subsequent operations on the good performed outside the territories of the Parties comply with the requirements in paragraph 1.
Section B - Origin Procedures
Article 4.12: Claims of Origin
1. Each Party shall require that an importer claiming preferential tariff treatment for a good:
2. Each Party, where appropriate, may request that an importer claiming preferential tariff treatment for a good demonstrate to the Party’s customs authority that the good qualifies as originating under Section A, including that the good satisfies the requirements in Article 4.11.
3. Each Party shall provide that, where an originating good was imported into the territory of that Party but no claim for preferential tariff treatment was made at the time of importation, the importer of the good may, no later than one year 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, on presentation of:
Article 4.13: Certificates of Origin
1. Each Party shall provide that an importer may satisfy a request under Article 4.12(1)(b) by providing a certificate of origin that sets forth a valid basis for a claim that a good is originating. Each Party shall provide that the certificate of origin need not be in a prescribed format, and that the certificate may be submitted electronically.
2. Each Party shall provide that a certificate of origin may be issued by the importer, exporter, or producer of the good. Where an exporter or importer is not the producer of the good, each Party shall provide that the exporter or importer may issue a certificate of origin based on:
3. Each Party shall provide that a certificate of origin may cover the importation of one or more goods or several importations of identical goods within a period specified in the certificate.
4. Each Party shall provide that a certificate of origin is valid for four years from the date on which the certificate was issued.
5. A Party may require that a certificate of origin for a good imported into its territory be completed in either Spanish or English.
6. For an originating good that is imported into the territory of a Party on or after the date of entry into force of this Agreement, each Party shall accept a certificate of origin issued by the importer, exporter, or producer of the good prior to that date, unless the Party possesses information indicating that the certificate is invalid.
7. Neither Party may require a certificate of origin or information demonstrating that the good qualifies as originating for:
Article 4.14: Obligations Relating to Importations
1. Each Party shall provide that the importer is responsible for submitting a certificate of origin or other information demonstrating that the good qualifies as originating, for the truthfulness of the information and data contained therein, for submitting any supporting documents requested by the Party’s customs authority, and for the truthfulness of the information contained in those documents.
2. Each Party shall provide that the fact that the importer has issued a certificate of origin based on information provided by the exporter or the producer shall not relieve the importer of the responsibility referred to in paragraph 1.
3. Each Party shall provide that an importer claiming preferential tariff treatment for a good imported into the Party’s territory shall maintain, for a period of five years after the date of importation of the good, a certificate of origin or other information demonstrating that the good qualifies as originating, and all other documents that the Party may require relating to the importation of the good, including records associated with:
1. For purposes of cooperation under Article 5.5 (Cooperation), each Party shall provide that an exporter or producer that issues a certificate of origin for a good exported from the Party’s territory shall provide a copy of the certificate to the Party’s customs authority upon its request.
2. Each Party shall provide that an exporter or producer that has issued a certificate of origin for a good exported from the Party’s territory shall maintain, for a period of at least five years after the date the certificate was issued, all records and supporting documents related to the origin of the good, including:
3. Each Party shall provide that where an exporter or producer has issued a certificate of origin, and has reason to believe that the certificate contains or is based on incorrect information, the exporter or producer shall immediately notify, in writing, every person to whom the exporter or producer issued the certificate of any change that could affect the accuracy or validity of the certificate. Neither Party may impose penalties on an exporter or producer in its territory for issuing an incorrect certificate if it voluntarily provides written notification in conformity with this paragraph.
Article 4.16: Procedures for Verification of Origin
1. Each Party shall grant any claim for preferential tariff treatment made in accordance with this Section, unless the Party possesses information indicating that the importer’s claim fails to comply with any requirement under Section A or Article 3.20 (Rules of Origin and Related Matters), except as otherwise provided in Article 3.21 (Customs Cooperation).
2. To determine whether a good imported into its territory qualifies as originating, the importing Party may, through its customs authority, verify the origin in accordance with its customs laws and regulations.
3. Where a Party denies a claim for preferential tariff treatment, it shall issue a written determination containing findings of fact and the legal basis for its determination. The Party shall issue the determination within a period established under its law.
4. A Party shall not subject an importer to penalties where the importer that made an incorrect declaration voluntarily makes a corrected declaration.
5. Where a Party determines through verification that an importer has certified more than once, falsely or without substantiation, that a good qualifies as originating, the Party may suspend preferential tariff treatment to identical goods imported by that person until the importer proves that it has complied with the Party’s laws and regulations governing claims of origin under this Agreement.
6. Each Party that carries out a verification of origin in which Generally Accepted Accounting Principles are pertinent shall apply those principles in the manner that they are applied in the territory of the Party from which the good was exported.
Article 4.17: Common Guidelines
By the date of entry into force of this Agreement, the Parties shall agree on and publish common guidelines for the interpretation, application, and administration of this Chapter and the relevant provisions of Chapter Three (National Treatment and Market Access for Goods). As appropriate, the Parties may subsequently agree to modify the common guidelines.
Section C - Definitions
Article 4.18: Definitions
For purposes of this Chapter:
adjusted value means the value determined in accordance with Articles 1 through 8, Article 15, and the corresponding interpretative notes of the Customs Valuation Agreement, adjusted, if necessary, to exclude any costs, charges, or expenses incurred for transportation, insurance, and related services incident to the international shipment of the merchandise from the country of exportation to the place of importation;
exporter means a person who exports goods from the territory of a Party;
fungible goods or materials means goods or materials that are interchangeable for commercial purposes and whose properties are essentially identical;
Generally Accepted Accounting Principles means the principles, rules, and procedures, including both broad and specific guidelines, that define the accounting practices accepted in the territory of a Party;
good means any merchandise, product, article, or material;
goods wholly obtained or produced entirely in the territory of one or both of the Parties means:
importer means a person who imports goods into the territory of a Party;
indirect material means a good used in the production, testing, or inspection of a good but not physically incorporated into the good, or a good used in the maintenance of buildings or the operation of equipment associated with the production of a good, including:
issued means prepared by and, where required under a Party’s domestic law or regulation, signed by the importer, exporter, or producer of the good;
location of the producer means site of production of a good;
material means a good that is used in the production of another good, including a part, ingredient, or indirect material;
non-originating good or non-originating material means a good or material that does not qualify as originating under this Chapter;
packing materials and containers for shipment means the goods used to protect a good during its transportation, and does not include the packaging materials and containers in which a good is packaged for retail sale;
producer means a person who engages in the production of a good in the territory of a Party;
production means growing, mining, harvesting, fishing, raising, trapping, hunting, manufacturing, processing, assembling, or disassembling a good;
recovered goods means materials in the form of individual parts that are the result of: (1) the complete disassembly of used goods into individual parts; and (2) the cleaning, inspecting, testing, or other processing of those parts as necessary for improvement to sound working condition one or more of the following processes: welding, flame spraying, surface machining, knurling, plating, sleeving, and rewinding in order for such parts to be assembled with other parts, including other recovered parts in the production of a remanufactured good of Annex 4.18;
remanufactured goods means industrial goods assembled in the territory of a Party, listed in Annex 4.18, that: (1) are entirely or partially comprised of recovered goods; and (2) have the same life expectancy and meet the same performance standards as new goods; and (3) enjoy the same factory warranty as such new goods;
self-produced material means an originating material that is produced by a producer of a good and used in the production of that good; and
value means the value of a good or material for purposes of calculating customs duties or for purposes of applying this Chapter.
Goods classified in the following Harmonized System subheadings may be considered remanufactured goods, except for those designed principally for use in automotive goods of Harmonized System headings or subheadings 8702, 8703, 8704.21, 8704.31, 8704.32, 8706, and 8707:
Article 5.1: Publication
1. Each Party shall publish its customs laws, regulations, and administrative procedures on the Internet or a comparable computer-based telecommunications network.
2. Each Party shall designate one or more inquiry points to address inquiries from interested persons concerning customs matters, and shall make available on the Internet information concerning procedures for making such inquiries.
3. To the extent possible, each Party shall publish in advance any regulations of general application governing customs matters that it proposes to adopt and provide interested persons the opportunity to comment on such proposed regulations prior to their adoption.
Article 5.2: Release of Goods
Each Party shall:
Article 5.3: Automation
Each Party’s customs authority shall:
Article 5.4: Risk Assessment
Each Party shall endeavor to adopt or maintain risk management systems that enable its customs authority to concentrate inspection activities on high risk goods and that simplify the clearance and movement of low risk goods.
Article 5.5: Cooperation
1. Each Party shall endeavor to provide the other Party with advance notice of any significant modification of administrative policy regarding the implementation of its customs laws that is likely to substantially affect the operation of this Agreement.
2. The Parties shall cooperate in achieving compliance with their laws and regulations pertaining to:
3. Where a Party has a reasonable suspicion of unlawful activity related to its laws or regulations governing importations, the Party may request that the other Party provide specific confidential information normally collected by the other Party in association with the importation of goods pertaining to trade transactions relevant to that activity. The Party shall make its request in writing, shall identify the requested information with sufficient specificity for the other Party to locate it, and shall specify the purposes for which the information is sought.
4. The other Party shall respond by providing any information that it has collected that is material to the request.
5. For purposes of paragraph 3, a reasonable suspicion of unlawful activity means a suspicion based on relevant factual information obtained from public or private sources, including:
6. Each Party shall endeavor to provide the other Party with any other information that would assist in determining whether imports from or exports to the other Party are in compliance with the other Party’s laws or regulations governing importations, in particular those related to the prevention of unlawful activities.
7. Each Party shall endeavor to provide the other with technical advice and assistance for the purpose of improving risk assessment techniques, simplifying and expediting customs procedures, advancing technical skills, and enhancing the use of technologies that can lead to improved compliance with laws and regulations governing importations.
8. Building on the procedures established in this Article, the Parties shall use best efforts to explore additional avenues of cooperation to enhance each Party’s ability to enforce its laws and regulations governing importations, including by:
Article 5.6: Confidentiality
1. Where a Party providing information to the other Party in accordance with this Chapter designates the information as confidential, the other Party shall maintain the confidentiality of the information. The Party providing the information may, in accordance with its domestic law, require written assurances from the other Party that the information will be held in confidence, will be used only for the purposes specified in the other Party’s request for information, and will not be disclosed without the Party’s specific permission.
2. A Party may decline to provide information requested by the other Party where the other Party has failed to act in conformity with assurances provided under paragraph 1.
3. Each Party shall adopt or maintain procedures in which confidential information, including information the disclosure of which could prejudice the competitive position of the person providing the information, submitted in connection with the Party’s administration of its customs laws shall be protected from unauthorized disclosure.
Article 5.7: Express Shipments
Each Party shall adopt or maintain separate, expedited customs procedures for express shipments, while maintaining appropriate customs control and selection, including procedures:
Article 5.8: Review and Appeal
Each Party shall ensure that with respect to its determinations on customs matters, importers in its territory have access to:
Article 5.9: Penalties
Each Party shall adopt or maintain measures that provide for the imposition of civil, administrative, and, where appropriate, criminal sanctions for violations of its customs laws and regulations, including those governing tariff classification, customs valuation, rules of origin, and the entitlement to preferential tariff treatment under this Agreement.
Article 5.10: Advance Rulings
1. Each Party, through its customs authority, shall issue written advance rulings prior to the importation of a good into its territory at the written request of an importer in its territory, or an exporter or producer in the territory of the other Party, on the basis of the facts and circumstances provided by the requester, concerning:
2. Each Party shall provide that its customs authority shall issue advance rulings within 150 days of a request, provided that the requester has submitted all necessary information.
3. Each Party shall provide that advance rulings shall be in force from their date of issuance, or such other date specified by the ruling, for at least three years, provided that the facts or circumstances on which the ruling is based remain unchanged.
4. The issuing Party may modify or revoke an advance ruling where facts or circumstances warrant, such as where the information on which the ruling is based is false or inaccurate.
5. Where an importer claims that the treatment accorded to an imported good should be governed by an advance ruling, the customs authority may evaluate whether the facts and circumstances of the importation are consistent with the facts and circumstances upon which the advance ruling was based.
6. Each Party shall make its advance rulings publicly available, subject to confidentiality requirements in its domestic law, for purposes of promoting the consistent application of advance rulings to other goods.
7. If a requester provides false information or omits relevant circumstances or facts in its request for an advance ruling, or does not act in accordance with the ruling’s terms and conditions, the importing Party may apply appropriate measures, including civil, criminal, and administrative actions, penalties, or other sanctions.
Article 5.11: Implementation
1. With respect to the obligations of Chile, Articles 5.1(1) and (2), 5.7(b), and 5.10(1)(b) shall enter into force three years after the date of entry into force of this Agreement.
2. Within 120 days after the date of entry into force of this Agreement, the Parties shall consult on the procedures that Chile needs to adopt to implement Article 5.10(1)(b) and on related technical assistance to be provided by the United States, and shall establish a work program outlining the steps needed for Chile to implement Article 5.10(1)(b).
3. Not later than 18 months after the date of entry into force of this
Agreement, the Parties shall consult to discuss the progress made by Chile in
implementing Article 5.10(1)(b) and to consider whether to engage in further cooperative
Sanitary and Phytosanitary Measures
The objectives of this Chapter are to protect human, animal, and plant health conditions in the Parties’ territories, enhance the Parties’ implementation of the SPS Agreement, provide a forum for addressing bilateral sanitary and phytosanitary matters, resolve trade issues, and thereby expand trade opportunities.
Article 6.1: Scope and Coverage
This Chapter applies to all sanitary and phytosanitary measures of a Party that may, directly or indirectly, affect trade between the Parties.
Article 6.2: General Provisions
1. Further to Article 1.3 (Relation to Other Agreements), the Parties affirm their existing rights and obligations with respect to each other under the SPS Agreement.
2. Neither Party may have recourse to dispute settlement under this Agreement for any matter arising under this Chapter.
Article 6.3: Committee on Sanitary and Phytosanitary Matters
1. The Parties hereby agree to establish a Committee on Sanitary and Phytosanitary Matters comprising representatives of each Party who have responsibility for sanitary and phytosanitary matters.
2. The Parties shall establish the Committee not later than 30 days after the date of entry into force of this Agreement through an exchange of letters identifying the primary representative of each Party to the Committee and establishing the Committee’s terms of reference.
3. The objectives of the Committee shall be to enhance the implementation by each Party of the SPS Agreement, protect human, animal, and plant life and health, enhance consultation and cooperation on sanitary and phytosanitary matters, and facilitate trade between the Parties.
4. The Committee shall seek to enhance any present or future relationships between the Parties’ agencies with responsibility for sanitary and phytosanitary matters.
5. The Committee shall provide a forum for:
6. The Committee shall meet at least once a year unless the Parties otherwise agree.
7. The Committee shall perform its work in accordance with the terms of reference referenced in paragraph 2. The Committee may revise the terms of reference and may develop procedures to guide its operation.
8. Each Party shall ensure that appropriate representatives with responsibility for the development, implementation, and enforcement of sanitary and phytosanitary measures from its relevant trade and regulatory agencies or ministries participate in meetings of the Committee. The official agencies and ministries of each Party responsible for such measures shall be set out in the Committee’s terms of reference.
9. The Committee may agree to establish ad hoc working groups in accordance with the Committee’s terms of reference.
Article 6.4: Definitions
For purposes of this Chapter, sanitary or phytosanitary measure means any measure referred to in Annex A, paragraph 1, of the SPS Agreement.
Technical Barriers to Trade
The objectives of this Chapter are to increase and facilitate trade through the improvement of the implementation of the TBT Agreement, the elimination of unnecessary technical barriers to trade, and the enhancement of bilateral cooperation.
Article 7.1: Scope and Coverage
1. Except as provided in paragraphs 2 and 3 of this Article, this Chapter applies to all standards, technical regulations, and conformity assessment procedures that may, directly or indirectly, affect trade in goods between the Parties. Notwithstanding Article 1.4 (Extent of Obligations), this Chapter applies only to central government bodies.
2. Technical specifications prepared by governmental bodies for production or consumption requirements of such bodies are not subject to the provisions of this Chapter, but are addressed in Chapter Nine (Government Procurement), according to its coverage.
3. This Chapter does not apply to sanitary and phytosanitary measures as defined in Annex A of the SPS Agreement.
Article 7.2: Affirmation of Agreement on Technical Barriers to Trade
Further to Article 1.3 (Relation to Other Agreements), the Parties affirm their existing rights and obligations with respect to each other under the TBT Agreement.
Article 7.3: International Standards
In determining whether an international standard, guide, or recommendation within the meaning of Articles 2, 5, and Annex 3 of the TBT Agreement exists, each Party shall apply the principles set out in Decisions and Recommendations adopted by the Committee since 1 January 1995, G/TBT/1/Rev.7, 28 November 2000, Section IX (Decision of the Committee on Principles for the Development of International Standards, Guides and Recommendations with relation to Articles 2, 5 and Annex 3 of the Agreement), issued by the WTO Committee on Technical Barriers to Trade.
Article 7.4: Trade Facilitation
The Parties shall intensify their joint work in the field of standards, technical regulations, and conformity assessment procedures with a view to facilitating access to each other’s markets. In particular, the Parties shall seek to identify bilateral initiatives that are appropriate for particular issues or sectors. Such initiatives may include cooperation on regulatory issues, such as convergence or equivalence of technical regulations and standards, alignment with international standards, reliance on a supplier’s declaration of conformity, and use of accreditation to qualify conformity assessment bodies, as well as cooperation through mutual recognition.
Article 7.5: Technical Regulations
1. Where a Party provides for the acceptance of a foreign technical regulation as equivalent to a particular technical regulation of its own, and the Party does not accept a technical regulation of the other Party as equivalent to that technical regulation, it shall, at the request of the other Party, explain the reasons for not accepting the technical regulation of the other Party as equivalent.
2. Where a Party does not provide for the acceptance of foreign technical regulations as equivalent to its own, that Party may, at the request of the other Party, explain the reasons for not accepting the other Party’s technical regulations as equivalent.
Article 7.6: Conformity Assessment
1. The Parties recognize that a broad range of mechanisms exists to facilitate the acceptance of conformity assessment results, including:
The Parties shall intensify their exchange of information on the range of mechanisms to facilitate the acceptance of conformity assessment results.
2. Where a Party does not accept the results of a conformity assessment procedure performed in the territory of the other Party, it shall, on request of the other Party, explain its reasons.
3. Each Party shall accredit, approve, license, or otherwise recognize conformity assessment bodies in the territory of the other Party on terms no less favorable than those it accords to conformity assessment bodies in its territory. If a Party accredits, approves, licenses, or otherwise recognizes a body assessing conformity with a particular technical regulation or standard in its territory and it refuses to accredit, approve, license, or otherwise recognize a body assessing conformity with that technical regulation or standard in the territory of the other Party, it shall, on request, explain the reasons for its refusal.
4. Where a Party declines a request from the other Party to engage in or conclude negotiations to reach agreement on facilitating recognition in its territory of the results of conformity assessment procedures conducted by bodies in the territory of the other Party, it shall, on request, explain its reasons.
Article 7.7: Transparency
1. Further to Article 20.2 (Publication), each Party shall allow persons of the other Party to participate in the development of standards, technical regulations, and conformity assessment procedures. Each Party shall permit persons of the other Party to participate in the development of such measures on terms no less favorable than those accorded to its own persons.
2. Each Party shall recommend that non-governmental standardizing bodies in its territory observe paragraph 1.
3. In order to enhance the opportunity for persons to provide meaningful comments, a Party publishing a notice under Article 2.9 or 5.6 of the TBT Agreement shall:
Each Party should allow at least 60 days from the transmission under subparagraph (b) for persons and the other Party to make comments in writing on the proposal.
4. Where a Party makes a notification under Article 2.10 or 5.7 of the TBT Agreement, it shall at the same time transmit the notification to the other Party, electronically, through the inquiry point referenced in paragraph 3(b).
5. Each Party shall publish, in print or electronically, or otherwise make available to the public, its responses to significant comments at the same time as the publication of the final technical regulation or conformity assessment procedure.
6. Each Party shall, on request of the other Party, provide information regarding the objective of, and rationale for, a standard, technical regulation, or conformity assessment procedure that the Party has adopted or is proposing to adopt.
7. Each Party shall implement this Article as soon as is practicable and in no event later than five years from the date of entry into force of this Agreement.
Article 7.8: Committee on Technical Barriers to Trade
1. The Parties hereby establish the Committee on Technical Barriers to Trade, comprising representatives of each Party, pursuant to Annex 7.8.
2. The Committee’s functions shall include:
3. Where the Parties have had recourse to consultations under paragraph 2(g) such consultations shall, on the agreement of the Parties, constitute consultations under Article 22.4 (Consultations).
4. A Party shall, on request, give favorable consideration to any sector-specific proposal the other Party makes for further cooperation under this Chapter.
5. The Committee shall meet at least once a year unless the Parties otherwise agree.
Article 7.9: Information Exchange
Any information or explanation that is provided on request of a Party pursuant to the provisions of this Chapter shall be provided in print or electronically within a reasonable period of time.
Article 7.10: Definitions
For purposes of this Chapter, technical regulation, standard, conformity assessment procedures, and central government body shall have the meanings assigned to those terms in Annex 1 of the TBT Agreement.
Committee on Technical Barriers to Trade
For purposes of Article 7.8, the Committee shall be coordinated by:
Section A - Safeguards
Article 8.1: Imposition of a Safeguard Measure
1. A Party may impose a safeguard measure described in paragraph 2, during the transition period only, if as a result of the reduction or elimination of a duty pursuant to this Agreement,1 a good originating in the territory of the other Party is being imported into the Party’s territory in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to constitute a substantial cause of serious injury, or threat thereof, to a domestic industry producing a like or directly competitive good.
2. If the conditions in paragraph 1 are met, a Party may to the extent as may be necessary to prevent or remedy serious injury, or threat thereof, and facilitate adjustment:
Article 8.2: Standards for a Safeguard Measure
1. A Party may apply a safeguard measure, including any extension thereof, for no longer than three years. Regardless of its duration, such measure shall terminate at the end of the transition period.
2. In order to facilitate adjustment in a situation where the expected duration of a safeguard measure is over one year, the Party applying the measure shall progressively liberalize it at regular intervals during the period of application.
3. Neither Party may impose a safeguard measure more than once on the same good.
4. Neither Party may impose a safeguard measure on a good that is subject to a measure that the Party has imposed pursuant to Article XIX of GATT 1994 and the Safeguards Agreement, and neither Party may continue maintaining a safeguard measure on a good that becomes subject to a measure that the Party imposes pursuant to Article XIX of GATT 1994 and the Safeguards Agreement.
5. On the termination of a safeguard measure, the rate of duty shall be no higher than the rate that, according to the Party’s Schedule to Annex 3.3 (Tariff Elimination), would have been in effect one year after the imposition of the measure. Beginning on January 1 of the year following the termination of the action, the Party that has applied the measure shall:
Article 8.3: Investigation Procedures and Transparency Requirements
1. A Party shall impose a safeguard measure only following an investigation by the Party’s competent authorities in accordance with Articles 3 and 4.2(c) of the Safeguards Agreement; and to this end, Articles 3 and 4.2(c) of the Safeguards Agreement are incorporated into and made a part of this Agreement, mutatis mutandis.
2. In the investigation described in paragraph 1, a Party shall comply with the requirements of Article 4.2(a) of the Safeguards Agreement; and to this end, Article 4.2(a) of the Safeguards Agreement is incorporated into and made a part of this Agreement, mutatis mutandis.
Article 8.4: Notification
1. A Party shall promptly notify the other Party, in writing, on:
2. A Party shall provide to the other Party a copy of the public version of the report of its competent authorities required under Article 8.3(1).
Article 8.5: Compensation
1. The Party taking a safeguard measure shall, in consultation with the other Party, provide to the other Party mutually agreed trade liberalizing compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the measure. Such consultations shall begin within 30 days of the imposition of the measure.
2. If the Parties are unable to reach agreement on compensation within 30 days after the consultations commence, the exporting Party shall be free to suspend the application of substantially equivalent concessions to the trade of the Party applying the safeguard measure.
3. A Party shall notify the other Party in writing at least 30 days before suspending concessions under paragraph 2.
4. The obligation to provide compensation under paragraph 1 and the right to suspend substantially equivalent concessions under paragraph 2 shall terminate on the later of: (a) the termination of the safeguard measure; or (b) the date on which the rate of duty returns to the rate of duty set out in the Party’s Schedule to Annex 3.3 (Tariff Elimination).
Article 8.6: Global Actions
1. Each Party retains its rights and obligations under Article XIX of GATT 1994 and the Safeguards Agreement.
2. This Agreement does not confer any additional rights or obligations on the Parties with regard to actions taken pursuant to Article XIX of GATT 1994 and the Safeguards Agreement.
Article 8.7: Definitions
For purposes of this Section:
domestic industry means, with respect to an imported good, the producers as a whole of the like or directly competitive good or those producers whose collective production of the like or directly competitive good constitutes a major proportion of the total domestic production of such good;
safeguard measure means a safeguard measure described in Article 8.1(2);
serious injury means a significant overall impairment in the position of a domestic industry;
substantial cause means a cause which is important and not less than any other cause;
threat of serious injury means serious injury that, on the basis of facts and not merely on allegation, conjecture, or remote possibility, is clearly imminent; and
transition period means the 10-year period beginning on the date of entry into force of this Agreement, except that transition period shall mean the 12-year period beginning on the date of entry into force of this Agreement in any case in which a safeguard measure is applied against an agricultural good and the Schedule to Annex 3.3 (Tariff Elimination) of the Party applying the measure provides for the Party to eliminate its tariffs on the good over 12 years.
Section B - Antidumping and Countervailing Duties
Article 8.8: Antidumping and Countervailing Duties
1. Each Party retains its rights and obligations under the WTO Agreement with regard to the application of antidumping and countervailing duties.
2. No provisions of this Agreement, including the provisions of Chapter Twenty-Two (Dispute Settlement), shall be construed as imposing any rights or obligations on the Parties with respect to antidumping or countervailing duty measures.
The objectives of this Chapter are to recognize the importance of conducting government procurement in accordance with the fundamental principles of openness, transparency, and due process; and to strive to provide comprehensive coverage of procurement markets by eliminating market access barriers to the supply of goods and services, including construction services.
Article 9.1: Scope and Coverage
1. This Chapter applies to any measure adopted or maintained by a Party relating to procurement by an entity listed in Annex 9.1:
2. This Chapter does not apply to:
3. Each Party shall ensure that its procuring entities listed in Annex 9.1 comply with this Chapter in conducting procurement covered by this Chapter.
4. Where an entity awards a contract that is not covered by this Chapter, nothing in this Chapter shall be construed to cover any good or service component of that contract.
5. No entity may prepare, design, or otherwise structure or divide, in any stage of the procurement, any procurement in order to avoid the obligations of this Chapter.
6. Nothing in this Chapter shall prevent either Party from developing new procurement policies, procedures, or contractual means, provided they are not inconsistent with this Chapter.
Article 9.2: General Principles
National Treatment and Non-Discrimination
1. With respect to any measure governing procurement covered by this Chapter, each Party shall accord to the goods and services of the other Party, and to the suppliers of the other Party of such goods and services, treatment no less favorable than the most favorable treatment the Party accords to its own goods, services, and suppliers.
2. With respect to any measure governing procurement covered by this Chapter, neither Party may:
Determination of Origin
3. For purposes of paragraphs 1 and 2, determination of the origin of goods shall be made on a non-preferential basis.
4. An entity shall not consider, seek, or impose offsets at any stage of a procurement.
Measures Not Specific to Procurement
5. Paragraphs 1 and 2 do not apply to measures respecting customs duties or other charges of any kind imposed on or in connection with importation, the method of levying such duties and charges or other import regulations, including restrictions and formalities, or measures affecting trade in services other than measures specifically governing procurement covered by this Chapter.
Article 9.3: Publication of Procurement Measures
Each Party shall promptly publish:
Article 9.4: Publication of Notice of Intended Procurement
1. For each procurement covered by this Chapter, an entity shall publish in advance a notice inviting interested suppliers to submit tenders for that procurement (“notice of intended procurement”), except as provided in Article 9.9(2). Each such notice shall be accessible during the entire period established for tendering for the relevant procurement.
2. Each notice of intended procurement shall include a description of the intended procurement, any conditions that suppliers must fulfill to participate in the procurement, the name of the entity issuing the notice, the address where suppliers may obtain all documents relating to the procurement, the time limits for submission of tenders, and the dates for delivery of the goods or services to be procured.
Article 9.5: Time Limits for the Tendering Process
1. An entity shall prescribe time limits for the tendering process that allow sufficient time for suppliers to prepare and submit responsive tenders, taking into account the nature and complexity of the procurement. An entity shall provide no less than 30 days between the date on which it publishes the notice of intended procurement and the deadline for submitting tenders.
2. Notwithstanding paragraph 1, where there are no qualification requirements for suppliers, entities may establish a time limit of less than 30 days, but in no case less than 10 days, in the following circumstances:
Article 9.6: Information on Intended Procurements
1. An entity shall provide interested suppliers tender documentation that includes all the information necessary to permit suppliers to prepare and submit responsive tenders. The documentation shall include all criteria that the entity will consider in awarding the contract, including all cost factors, and the weights or, where appropriate, the relative values, that the entity will assign to these criteria in evaluating tenders.
2. Where an entity does not publish all the tender documentation by electronic means, the entity shall, on request of any supplier, promptly make the documentation available in written form to the supplier.
3. Where an entity, during the course of a procurement, modifies the criteria referred to in paragraph 1, it shall transmit all such modifications in writing:
Article 9.7: Technical Specifications
1. An entity shall not prepare, adopt, or apply any technical specification with the purpose or the effect of creating unnecessary obstacles to trade between the Parties.
2. Any technical specification prescribed by an entity shall be, where appropriate:
3. An entity shall not prescribe technical specifications that require or refer to a particular trademark or trade name, patent, design or type, specific origin or producer or supplier unless there is no sufficiently precise or intelligible way of otherwise describing the procurement requirements and provided that, in such cases, words such as “or equivalent” are included in the tender documentation.
4. An entity shall not seek or accept, in a manner that would have the effect of precluding competition, advice that may be used in the preparation or adoption of any technical specification for a specific procurement from a person that may have a commercial interest in that procurement.
5. For greater certainty, this Article is not intended to preclude a Party from preparing, adopting, or applying technical specifications to promote the conservation of natural resources.
Article 9.8: Conditions for Participation
1. Where an entity requires suppliers to satisfy registration, qualification, or any other requirements or conditions for participation (“conditions for participation”) in order to participate in a procurement, the entity shall publish a notice inviting suppliers to apply for participation. The entity shall publish the notice sufficiently in advance to provide interested suppliers sufficient time to prepare and submit applications and for the entity to evaluate and make its determinations based on such applications.
2. Each entity shall:
3. Entities may establish publicly available lists of suppliers qualified to participate in procurements. Where an entity requires suppliers to qualify for such a list in order to participate in a procurement, and a supplier that has not yet qualified applies to be included on the list, the entity shall promptly start the qualification procedures for the supplier and shall allow the supplier to participate in the procurement, provided there is sufficient time to complete the procedures within the time period established for tendering.
4. No entity may impose the condition that, in order for a supplier to participate in a procurement, the supplier has previously been awarded one or more contracts by an entity of that Party or that the supplier has prior work experience in the territory of that Party. An entity shall judge a supplier’s financial and technical capacities on the basis of its global business activities including both its activity in the territory of the Party of the supplier, and its activity, if any, in the territory of the Party of the entity.
5. An entity shall promptly communicate to any supplier that has applied for qualification its decision on whether that supplier is qualified. Where an entity rejects an application for qualification or ceases to recognize a supplier as qualified, that entity shall, on request of the supplier, promptly provide it a written explanation of the reasons for its decision.
6. Nothing in this Article shall preclude an entity from excluding a supplier from a procurement on grounds such as bankruptcy or false declarations.
Article 9.9: Tendering Procedures
1. Entities shall award contracts by means of open tendering procedures, in the course of which any interested supplier may submit a tender.
2. Provided that the tendering procedure is not used to avoid competition or to protect domestic suppliers, entities may award contracts by means other than open tendering procedures in the following circumstances, where applicable:
3. An entity shall maintain a record or prepare a written report providing specific justification for any contract awarded by means other than open tendering procedures, as provided in paragraph 2.
Article 9.10: Awarding of Contracts
1. An entity shall require that in order to be considered for award, a tender must be submitted in writing and must, at the time it is submitted:
2. Unless an entity determines that it is not in the public interest to award a contract, it shall award the contract to the supplier that the entity has determined to be fully capable of undertaking the contract and whose tender is determined to be the most advantageous in terms of the requirements and evaluation criteria set out in the tender documentation.
3. No entity may cancel a procurement, or terminate or modify awarded contracts, in order to avoid the obligations of this Chapter.
Article 9.11: Information on Awards
Information Provided to Suppliers
1. Subject to Article 9.15, an entity shall promptly inform suppliers participating in a tendering procedure of its contract award decision. On request, an entity shall provide a supplier whose tender was not selected for award the reasons for not selecting its tender and the relative advantages of the tender the entity selected.
Publication of Award Information
2. After awarding a contract covered by this Chapter, an entity shall promptly publish a notice that includes at least the following information about the award:
Maintenance of Records
3. An entity shall maintain records and reports relating to tendering procedures and contract awards covered by this Chapter, including the records and reports provided for in Article 9.9(3), for a period of at least three years.
Article 9.12: Ensuring Integrity in Procurement Practices
Each Party shall adopt the necessary legislative or other measures to establish that it is a criminal offense under its law for:
Article 9.13: Domestic Review of Supplier Challenges
Independent Review Authorities
1. Each Party shall establish or designate at least one impartial administrative or judicial authority that is independent from its entities to receive and review challenges that suppliers submit relating to the Party’s measures implementing this Chapter in connection with a procurement covered by this Chapter and make appropriate findings and recommendations. Where a challenge by a supplier is initially reviewed by a body other than such an impartial authority, the Party shall ensure that the supplier may appeal the initial decision to an impartial administrative or judicial authority that is independent of the entity that is the subject of the challenge.
2. Each Party shall provide that an authority it establishes or designates under paragraph 1 has authority to take prompt interim measures pending the resolution of a challenge to preserve the supplier’s opportunity to participate in the procurement and to ensure that the Party complies with its measures implementing this Chapter, including by suspending the contract award or the performance of a contract that has already been awarded.
3. Each Party shall ensure that its review procedures are published and are timely, transparent, effective, and consistent with due process principles.
4. Each Party shall ensure that all documents related to a challenge to a procurement covered by this Chapter are made available to any authority it establishes or designates under paragraph 1.
5. Notwithstanding other review procedures provided for or developed by each of the Parties, each Party shall ensure that any authority it establishes or designates under paragraph 1 provides at least the following:
6. Each Party shall ensure that a supplier’s submission of a challenge will not prejudice the supplier’s participation in ongoing or future procurements.
Article 9.14: Modifications and Rectifications
1. Either Party may modify its coverage under this Chapter provided that it:
2. Either Party may make rectifications of a purely formal nature to its coverage under this Chapter, or minor amendments to its Schedules to Annex 9.1, Sections (A) through (C), provided that it notifies the other Party in writing and the other Party does not object in writing within 30 days of the notification. A Party that makes such a rectification or minor amendment shall not be required to provide compensatory adjustments.
3. A Party need not provide compensatory adjustments in those circumstances where the Parties agree that the proposed modification covers an entity over which a Party has effectively eliminated its control or influence. Where the Parties do not agree that such government control or influence has been effectively eliminated, the objecting Party may request further information or consultations with a view to clarifying the nature of any government control or influence and reaching agreement on the entity’s continued coverage under this Chapter.
4. Where the Parties are in agreement on the proposed modification, rectification, or minor amendment, including where a Party has not objected within 30 days under paragraph 1 or 2, the Commission shall give effect to the agreement by modifying forthwith the relevant Section of Annex 9.1.
Article 9.15: Non-Disclosure of Information
1. The Parties, their entities, and their review authorities shall not disclose confidential information the disclosure of which would prejudice legitimate commercial interests of a particular person or might prejudice fair competition between suppliers, without the formal authorization of the person that provided the information to the Party.
2. Nothing in this Chapter shall be construed as requiring a Party or its entities to disclose confidential information the disclosure of which would impede law enforcement or otherwise be contrary to the public interest.
Article 9.16: Exceptions
Provided that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between Parties where the same conditions prevail or a disguised restriction on trade between the Parties, nothing in this Chapter shall be construed to prevent a Party from adopting or maintaining measures:
The Parties understand that subparagraph (b) includes environmental measures necessary to protect human, animal, or plant life or health.
Article 9.17: Public Information
1. In order to facilitate access to information on commercial opportunities under this Chapter, each Party shall ensure that electronic databases that provide current information on all procurements covered by this Chapter that are conducted by entities listed in Annex 9.1(A), including information that can be disaggregated by detailed categories of goods and services, are made available to interested suppliers of the other Party, through the Internet or a comparable computer-based telecommunications network. Each Party shall, on request of the other Party, provide information on:
3. Each Party shall encourage its entities to publish, as early as possible in the fiscal year, information regarding the entity’s procurement plans.
Article 9.18: Committee on Procurement
The Parties hereby establish a Committee on Procurement comprising representatives of each Party. On request, the Committee shall meet to address matters related to the implementation of this Chapter, such as:
Article 9.19: Further Negotiations
On request of either Party, the Parties shall enter into negotiations with a view to extending coverage under this Chapter on a reciprocal basis, if a Party provides, through an international agreement entered into after entry into force of this Agreement, access to its procurement market for suppliers of a non-Party beyond what it provides under this Agreement to suppliers of the other Party.
Article 9.20: Definitions
For purposes of this Chapter:
build-operate-transfer contract and public works concession contract mean any contractual arrangement, the primary purpose of which is to provide for the construction or rehabilitation of physical infrastructure, plant, buildings, facilities, or other government owned works and under which, as consideration for a supplier’s execution of a contractual arrangement, the entity grants to the supplier, for a specified period of time, temporary ownership or a right to control and operate, and demand payment for the use of, such works for the duration of the contract;
entity means an entity listed in Annex 9.1;
in writing or written means any expression of information in words, numbers, or other symbols, including electronic expressions, that can be read, reproduced, and stored;
international standard means a standard that has been developed in conformity with the document referenced in Article 7.3 (International Standards);
offsets means conditions imposed or considered by an entity prior to, or in the course of, its procurement process that encourage local development or improve a Party’s balance of payments accounts by means of requirements of local content, licensing of technology, investment, counter-trade, or similar requirements;
procurement official means a person who performs procurement functions;
publish means to disseminate information in an electronic or paper medium that is distributed widely and is readily accessible to the general public;
supplier means a person that provides or could provide goods or services to an entity; and
technical specification means a specification that lays down the characteristics of goods to be procured or their related processes and production methods, or the characteristics of services to be procured or their related operating methods, including the applicable administrative provisions, and a requirement relating to conformity assessment procedures that an entity prescribes. A technical specification may also include or deal exclusively with terminology, symbols, packaging, marking or labeling requirements, as they apply to a good, process, service or production or operating method.
Section A - Central Level of Government Entities
This Agreement applies to procurement by the Central Level of Government Entities listed in this Section where the value of the procurement is estimated, in accordance with Section G, to equal or exceed the following relevant threshold. Unless otherwise specified within this Section, all agencies subordinate to those listed are covered by this Agreement.
For procurement of goods and services
(To be adjusted according to the formula in Section G, paragraph 2): $56,190
For procurement of construction services
(To be adjusted according to the formula in Section G, paragraph 3): $6,481,000
Schedule of Chile
1. Presidencia de la República
Intendencia I Región
Intendencia II Región
Intendencia IV Región
Intendencia V Región
Intendencia VI Región
Intendencia VII Región
Intendencia VIII Región
Intendencia IX Región
Intendencia X Región
Intendencia XII Región
Intendencia Región Metropolitana
Schedule of the United States
1. Advisory Commission on Intergovernmental Relations
This Agreement applies to procurement by the Sub-Central Level Government Entities listed in this Section where the value of the procurement is estimated, in accordance with Section G, to equal or exceed the following relevant threshold.
(To be adjusted according to the formula in Section G, paragraph 3)
For procurement of goods and services: $460,000
For procurement of construction services: $6,481,000
Schedule of Chile
1. Municipalidad de Arica
Schedule of the United States
1. For those states marked by an asterisk with pre-existing restrictions, the Chapter does not apply to procurement of construction-grade steel (including requirements on subcontracts), motor vehicles and coal.
2. Nothing in this Section shall be construed to prevent any state entity from applying restrictions that promote the general environmental quality in that state, as long as such restrictions are not disguised barriers to international trade.
3. This Chapter shall not apply to any procurement made by a covered entity on behalf of non-covered entities at a different level of government.
4. This Chapter shall not apply to restrictions attached to Federal funds for mass transit and highway projects.
5. This Chapter shall not apply to State Government Entities’ procurements of printing services.
6. This Chapter shall not apply to preferences or restrictions associated with programs administered by entities that promote the development of distressed areas and businesses owned by minorities, disabled veterans, and women.
Section C - Other Covered Entities
This Agreement applies to procurement by the Other Covered Entities listed in this Section where the value of the procurement is estimated, in accordance with Section G, to equal or exceed the following relevant threshold.
For goods and services of List A Entities
(To be adjusted according to the formula in Section G, paragraph 2): $280,951
For goods and services of List B Entities
(To be adjusted according to the formula in Section G, paragraph 3): $518,000
For construction services of List A and List B Entities
(To be adjusted according to the formula in Section G, paragraph 3): $6,481,000
Schedule of Chile
1. Empresa Portuaria Arica
Schedule of the United States
1. Tennessee Valley Authority
1. The Port Authority of New York and New Jersey, with the following exceptions:
2. The Port of Baltimore (not including procurement of transit cars, buses and related equipment and subject to the conditions specified for the state of New York in Section B)
3. The New York Power Authority (not including procurement of transit cars, buses and related equipment and subject to the conditions specified for the state of New York in Section B)
4. Rural Utilities Service Financing:
1. With respect to procurement by entities listed in this Section, this Chapter shall not apply to restrictions attached to Federal funds for airport projects.
Section D – Goods
This Chapter applies to all goods procured by the entities listed in Annex 9.1, Sections (A) through (C), subject to the Notes to the respective Sections and the General Notes. (For complete listing of U.S. Federal Supply Classification, see http://www.scrantonrtg.com/secrc/fsc-codes/fsc.html.)
Section E – Services
This Chapter applies to all services procured by the entities listed in Annex 9.1, Sections (A) through (C), subject to the Notes to the respective Sections, the General Notes, and the Notes to this Section, except for the services in the categories of the Common Classification System excluded in the Schedules of each Party. (For complete listing of the Common Classification System, see nafta/chap-105.asp.)
The following services, as elaborated in the Common Classification
System, are excluded:
Schedule of the United States
A. Research and Development
D. Information Processing and Related Telecommunications Services
J. Maintenance, Repair, Modification, Rebuilding and Installation of Equipment
M. Operation of Government-Owned Facilities
V. Transportation, Travel and Relocation Services
All services purchased in support of military forces overseas are excluded from coverage of this Chapter.
Section F – Construction Services
This Chapter applies to all construction services procured by the Entities listed in Annex 9.1, Sections (A) through (C), subject to the Notes to the respective sections, the General Notes, and the Notes to this Section, except for the construction services set out in the Schedules to this Annex.
Schedule of Chile
No construction services are excluded.
Schedule of the United States
The following construction services are excluded:
In accordance with this Chapter, buy national requirements on articles, supplies and materials acquired for use in construction contracts covered by this Chapter shall not apply to goods of Chile.
Section G – Threshold Adjustment Formulas
1. In calculating the value of a contract for the purpose of ascertaining whether the procurement is covered by this Chapter, an entity shall include the maximum total estimated value of the procurement over its entire duration, taking into account all options, premiums, fees, commissions, interest and other revenue streams or other forms of renumeration provided for in such contracts.
2. The calculations referred to in Annex 9.1, Sections (A) through (C) that specifically referenced this paragraph shall be made in accordance with the following:
T0 x (1+ Pi) = T1
3. The calculations referred to in Annex 9.1, Sections (A) through (C) that specifically referenced this paragraph shall be made in accordance with the following:
Section H - General Notes
Schedule of Chile
Schedule of the United States
1. This Chapter does not apply to set-asides on behalf of small and minority businesses.
2. This Chapter does not apply to the procurement of transportation services that form a part of, or are incidental to, a procurement contract.
3. Where a contract to be awarded by an entity is not covered by this Chapter, nothing in this Chapter shall be construed to cover any good or service component of that contract.
Footnotes: Chapter 3
1 For greater certainty, “goods of the Party” includes goods produced in a state or region of that Party.
2 The table comparing Chilean beef norms and USDA quality grades is intended to serve as a reference for consumers in Chile by describing USDA beef quality grade names in terms that are easily and already understood. However, this comparison is not intended to denote equivalency between the two grading systems for the purposes of reciprocal grading or the marketing of SAG classified beef under USDA grade names in the United States.
3 Proper nomenclature for beef cuts traded in the
United States can be found in, and should reference, the U.S.Department of Agriculture’s Institutional Meat Purchase Specifications
1 A Party may require an importer to provide sufficient guarantee in the form of a surety, a deposit, or some other appropriate instrument, covering the ultimate payment of the customs duties for which the goods may be liable.
1 The Parties note that many of Chile’s products received duty-free treatment under the U.S. Generalized System of Preferences prior to the entry into force of this Agreement.
2 The Parties understand that neither tariff rate quotas nor quantitative restrictions would be a permissible form of safeguard measure.