EUROPEAN COMMISSION

Brussels, 5.7.2023

COM(2023) 431 final

2023/0257(NLE)

Proposal for a

COUNCIL DECISION

on the signing, on behalf of the European Union, and provisional application of the Advanced Framework Agreement between the European Union and its Member States, of the one part, and the Republic of Chile, of the other part

EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

•Reasons for and objectives of the proposal

Politically, the AFA with the Republic of Chile ('Chile') marks an important step towards strengthening the European Union’s role in South America, based on shared universal values such as democracy and human rights. It paves the way for enhancing political, regional and global cooperation between two like-minded partners. The implementation of the AFA will entail practical benefits for both sides, forming a basis for the promotion of the European Union’s broader political interests.

Since the current Association Agreement was signed 20 years ago, the world has changed substantially. The AFA responds to these changes and addresses new global challenges. The update of the Association Agreement comes at a time when Chile and EU societies and economies are facing unprecedented global challenges as a result of the Russian invasion of Ukraine. The repercussions of the war, including global inflation, supply chain disruptions and the energy crisis, have brought to light the urgent need to strengthen mutually beneficial ties with key like-minded allies to accelerate the energy transition, reinforce strategic supply chains and diversify sources of supply.

In 2006, the European Commission adopted a ‘Global Europe’ strategy, modernising its agenda for EU trade policy and seeking deeper trade Agreements. The EU has concluded Agreements with other countries in the region (Trade Agreement with Colombia, Ecuador and Peru, Association Agreement with Central America) and beyond, inter alia with Canada, Japan, New Zealand, Singapore and Vietnam.

Chile has signed 26 FTA with 64 countries, including with the US (2004), China (2006) and Japan (2007). Chile also joined the Pacific Alliance and the Trans-Pacific Partnership (now Comprehensive and Progressive Agreement for Trans-Pacific Partnership).

The above-mentioned international agreements go well beyond the ambition and scope of the existing EU-Chile Association Agreement in most areas. As a result, both Parties expressed interest in the modernisation of the Association Agreement to further improve their political and economic relations, and to deepen cooperation and trade.

During a meeting in the margins of the EU-CELAC Summit held in Santiago on 26-27 January 2013, leaders from the EU and Chile agreed to explore options to modernise the Association Agreement, 10 years after its coming into force. In April 2015, the 6th EU-Chile Association Council endorsed the establishment of the joint working group (‘the Group’) on the modernisation of the Association Agreement. The aim of the Group was to conduct a scoping exercise by assessing the level of ambition of the perspective negotiations to modernise the Association Agreement in all areas. The Group created two subgroups, one responsible for political and cooperation and the other for trade. The subgroups concluded their work on the occasion of the 14th EU-Chile Association Committee that was held on 31 January 2017.

The negotiations were formally launched on 16 November 2017. The negotiations were conducted in consultation with the Council Working Party on Latin America and the Caribbean. The Trade Policy Committee was consulted on the trade-related parts of the Agreement. The European Parliament has been informed about the outcome of the negotiations.

The EU and Chile reached the political conclusion of the negotiations on 9 December 2022 in Brussels. The modernisation of the existing EU-Chile Association Agreement revolves around two legal instruments:

1.the AFA annexed to this proposal, which includes a) the Political and Cooperation pillar and b) the Trade and Investment pillar (inclusive of investment protection provisions); and

2.an Interim Agreement on Trade between the European Union and Republic of Chile (‘ITA’) covering trade and investment liberalisation. The ITA will cease to apply when the AFA enters into force.

The Agreement sets up an institutional framework composed of the Joint Council, Joint Committee and Sub-Committees and other bodies to assist the Joint Council. The Agreement provides for a mechanism to address failure by one of the Parties to fulfil obligations assumed under the AFA.

•Consistency with existing policy provisions in the policy area

The AFA is fully in line with the overall EU vision for its partnership with Latin America and the Caribbean, as outlined in the Joint Communication to the European Parliament and the Council of the European Union, Latin America and the Caribbean: joining forces for a common future, adopted on 17 April 2019. It also fits the EU Commission Work Programme 2023 (A stronger Europe in the world).

In addition, the Trade and Investment Part of the AFA is fully in line with the “Trade for All” strategy of October 2015 by anchoring trade and investment policy in European and universal standards and values alongside core economic interests, putting a greater emphasis on sustainable development, human rights, tax evasion, consumer protection, and responsible and fair trade.

The AFA provides a modernised comprehensive legal framework for EU-Chile relations and replaces the current Association Agreement, including any subsequent decision by its institutional bodies, except for the Wine and Spirits agreements (previously annexed to the Association Agreement). Over the years, the EU and Chile have concluded several bilateral sectoral agreements, including the Agreement on Trade in Wines and the Agreement on Trade in Spirits and Aromatised Drinks (hereinafter ‘the Wines and Spirits Agreements’) on the mutual recognition and protection of designations for wines and spirit drinks signed in Brussels. The Wines and Spirits Agreements, previously annexed to the Association Agreement 3 , are incorporated in the AFA.

•Consistency with other Union policies

Furthermore, Joint Statements on the Provisions on Trade and Sustainable Development are attached to the AFA and to the ITA, and foresee that the Parties will, upon the entry into force of the ITA, initiate a formal review process of its trade and sustainable development aspects in order to consider the incorporation, as appropriate, of additional provisions that may be deemed relevant by either Party at that time, including in the context of their respective domestic policy developments and their recent international treaty practice. Such additional provisions may relate, in particular, to further enhancing the enforcement mechanism of the Trade and Sustainable Development chapter, including the possibility to apply a compliance phase, and adequate countermeasures as a last resort. Without prejudice to the outcome of the review, the Parties will also consider the possibility of including the Paris Agreement on Climate Change as an essential element of the Agreements in the future.

Cooperation in Research and Innovation is in accordance with the Agreement for scientific and technological cooperation between the European Community and the Republic of Chile, signed in September 2002 and entered into force in January 2007.

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

•Legal basis

Substantive legal basis

The substantive legal basis for a decision under Article 218(5) TFEU depends primarily on the objective and content of the AFA. According to the case-law, if examination of an EU measure reveals that it pursues two purposes or that it comprises two components and if one of these is identifiable as the main or predominant purpose or component, whereas the other is merely incidental, the measure must be founded on a single legal basis, namely that required by the main or predominant purpose or component.

Exceptionally, if it is established, on the other hand, that the measure simultaneously pursues a number of objectives, or has several components, which are inextricably linked without one being incidental to the other, so that various provisions of the Treaty are applicable, the measure must be founded on the various corresponding legal bases (see, to that effect, judgments of 10 January 2006, Commission v Parliament and Council, C‑178/03, EU:C:2006:4, paragraphs 42 and 43; of 11 June 2014, Commission v Council, C‑377/12, EU:C:2014:1903, paragraph 34; of 14 June 2016, Parliament v Council, C‑263/14, EU:C:2016:435, paragraph 44; and of 4 September 2018, Commission v Council (Kazakhstan), C-244/17, ECLI:EU:C:2018:662, paragraph 40).

Article 218(5) TFEU provides that the Council shall adopt a decision authorising the signing of the agreement and, if necessary, its provisional application before entry into force.

Article 218(8) TFEU provides that the Council is to act by qualified majority except for the circumstances listed in the second subparagraph of Article 218(8) TFEU where the Council is to act unanimously. Given the fact that the predominant components of the Agreement are trade policy, transport, and economic, financial and technical cooperation with third countries, the voting rule for this particular case is therefore qualified majority.

•Subsidiarity (for non-exclusive competence)

On 13 November 2017, the Council adopted a Decision authorising the European Commission and the High Representative of the Union for Foreign Affairs and Security Policy to open negotiations for a modernised agreement with Chile to replace the Association Agreement.

Those parts of the AFA that fall under EU competence shared with Member States, cover policy areas and elements that lend themselves to external action at the level of the Union. In the policy areas where regulatory action has been undertaken at the level of the Union, external exercise by the Union of the competence covered is inevitable (Article 3(2) TFEU). Additionally, in order to achieve meaningful cooperation and in order to be in a stronger negotiating position vis-à-vis Chile, it has been judged that action at the level of the Union was more desirable than action at the level of the individual Member States Therefore, action at the Union level was considered to be more effective than action at national level.

•Proportionality

This initiative pursues directly the objectives of the Union's external action and contributes to the political priority of 'EU as a stronger global actor’. It is in line with the EU Global Strategy’s orientations to engage with other Countries and to revamp our external partnerships in a responsible way, in order to attain the EU's external priorities. It contributes to the EU’s objectives concerning trade and economic and technical cooperation with third countries.

Negotiations for the AFA with Chile were carried out in accordance with the negotiating directives set out by the Council. The outcome of negotiations does not go beyond what is necessary to achieve the policy objectives set out in the negotiating directives.

•Choice of the instrument

3.RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

•Ex-post evaluations/fitness checks of existing legislation

These assessments demonstrated that, while the coverage of the existing trade pillar was comprehensive at the time, there was scope for further improvements of the rules and achieving further market access. It also concluded that it was necessary to update the Association Agreement to the evolution of the global trade landscape.

Furthermore, a “Sustainability Impact Assessment in Support of the Negotiations for the Modernisation of the Trade Part of the Association Agreement with Chile” was commissioned by the Commission and completed in May 2019.

•Stakeholder consultations

In the context of the Impact Assessment, DG Trade consulted interested stakeholders including businesses, civil society stakeholders, NGOs, trade unions as well as trade associations, chambers of commerce and other private interests, on the modernisation. These consultations with stakeholders involved different consultation activities including open public on-line consultation.

These external studies, and the consultations held in the context of their preparation, provided the Commission with input that has been of great value in the negotiations of the AFA.

During the negotiations, meetings to debrief civil society organisations on the status of the negotiations and to exchange views on the modernisation were also organised.

Negotiations were carried out in consultation with the Council's Working Party on Latin America and the Caribbean on the political and cooperation aspects of this Agreement, and in consultation with the Trade Policy Committee on the trade aspects of this Agreement, as the special committee designated by the Council in accordance with Article 218(4) TFEU. The European Parliament and the European Economic and Social committee were also regularly informed through the Committee on International Trade (INTA), notably its Monitoring Group on Chile, and the Committee on Foreign Affairs. The texts progressively resulting from the negotiations were circulated throughout the process to both institutions.

•Collection and use of expertise

 •Impact assessment

Furthermore, the Sustainability Impact Assessment (SIA) carried out during the negotiation provides a comprehensive assessment of the potential economic, social and environmental impacts of increased trade liberalisation under the AFA in the EU and Chile. The SIA also analyses the potential impacts of the modernisation on Human Rights and on the manufacturing, agriculture and services sectors.

•Regulatory fitness and simplification

•Fundamental rights

4.BUDGETARY IMPLICATIONS

5.OTHER ELEMENTS

•Implementation plans and monitoring, evaluation and reporting arrangements

•Explanatory documents (for directives)

•Detailed explanation of the specific provisions of the proposal

The AFA also includes a civil society consultation mechanism extended to the whole Agreement to allow the civil society on both sides to be heard on all the provisions in the Agreement.

·Political Dialogue, Foreign policy, International Peace and Security, Governance and Human Rights

·Justice, Freedom and Security

·Sustainable Development

·Economic, Social and Cultural Partnership

·Other areas (macroeconomic policies, tax matters, consumer policy, public health, sport and physical activity)

·Modernisation of the State, and the Public Service, Decentralisation, Regional Policy and Inter-Institutional Cooperation

Emphasis is put on a wide range of crucial issues, including environmental protection, climate change, sustainable energy, ocean governance, rule of law, human and women’s rights, responsible business conduct, labour rights and disaster risk reduction. Provisions in Part II will allow a more coordinated and common action in new areas such as public health, state modernisation, management of migration flows, non-proliferation of WMDs, money laundering or financing of terrorism and cybercrime.

This will translate into a stronger partnership at global level e.g. concerning the agenda 2030, the action against climate change, ocean governance and on issues of global democratic governance and human rights, international migration, peace and security.

The objectives of the provisions of this Protocol are to prevent corruption in trade and investment through different measures, notably by promoting integrity in the private and public sector, enhancing internal controls, external auditing and financial reporting as well as to strengthen the fight against corruption already pursued through international conventions, in particular the United Nations Convention against corruption (UNCAC).

In this regard, the Parties reiterate their commitment to make corruption a criminal offence for government officials and to consider as well making corruption an offence for businesses. The two sides have agreed to certain disciplines to tackle money laundering.

The Protocol also promotes the active participation of civil society in the prevention and fight against corruption. It also foresees a consultation mechanism in case of disagreement on the interpretation or implementation of the anti-corruption provisions.

In line with the objectives set by the negotiating directives, Part III of the AFA will offer:

·Improved market access for agricultural and fisheries exports and improved rules

·Simplified Rules of Origin

·Modernised and simplified border procedures

·Ensuring fair trade and business conditions

·Ensuring sustainability

·Focusing on the needs of smaller businesses

·Opportunities for service suppliers and rules for digital trade

·Encouraging investment

·Access to Chilean public tenders

·Setting better protection for innovation and creative works

·Ensuring safe and sustainable trade in agri-food products

·Ensuring that technical regulations, standards, and conformity assessment procedures are non-discriminatory and do not create unnecessary obstacles to trade

·Transparency and Good Regulatory Practices

·Modern Procedures on Dispute settlement

Part IV (General Institutional Framework) contains the general, institutional and final provisions. The Agreement sets up an institutional framework composed of a Joint Council, a Joint Committee and a number of Sub-Committees. It sets out structures for engaging in dialogues with civil society. It introduces a procedure for addressing cases of failure by a Party to fulfil its obligations under the Agreement.

The Agreement provides the possibility to be provisionally applied in full or in part. It is concluded for an indefinite period of time and replaces the Association Agreement and the Interim Agreement on Trade.

2023/0257 (NLE)

Proposal for a

COUNCIL DECISION

on the signing, on behalf of the European Union, and provisional application of the Advanced Framework Agreement between the European Union and its Member States, of the one part, and the Republic of Chile, of the other part

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 91(1), 100(2), 207 and 212, in conjunction with Article 218(5) thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1)In November 2017, the Council authorised the European Commission and the High Representative of the Union for Foreign Affairs and Security Policy to open negotiations with Chile on a modernised Association Agreement between the European Union and its Member States, of one part, and the Republic of Chile, of the other part.

(2)The negotiations of the Advanced Framework Agreement between the European Union and its Member States, of the one part, and the Republic of Chile, of the other part ('the Agreement') were successfully concluded by Chief Negotiators in December 2022.

(3)The Agreement should therefore be signed on behalf of the Union, subject to its conclusion at a later date.

(4)In view of the need to apply this Agreement ahead of its entry into force following ratifications by the Member States, certain provisions of the Agreement should be applied provisionally.

(5)The Agreement, in accordance with its Article 41.10, does not, within the Union, confer rights or impose obligations on persons, other than those created between the Parties under public international law.

(6)A Joint Statement on the Provisions on Trade and Sustainable Development contained in the Advanced Framework Agreement between the European Union and its Member States, of the one part, and the Republic of Chile, of the other part (‘Joint Statement’), is attached to the Agreement.

HAS ADOPTED THIS DECISION:

Article 1

1. The signing of the Agreement is hereby approved on behalf of the Union, subject to the conclusion of the Agreement.

2. The Joint Statement attached to the Agreement is hereby endorsed on behalf of the Union.

3. The texts of the Agreement and of the Joint Statement are attached to this Decision.

Article 2

The Commission is hereby authorised to designate the person(s) empowered to sign the Agreement, and to endorse the Joint Statement attached to it on behalf of the Union, subject to the conclusion of the Agreement at a later date.

Article 3

1. Pending its entry into force, in accordance with Article 41.5 of the Agreement and subject to the notifications provided for therein, the following parts of the Agreement shall be applied provisionally between the Union and the Republic of Chile:

–Chapter 1

–Chapter 2

–Chapter 3 – with the exception of Article 3.4 (consular protection)

–Chapter 4

–Chapter 5

–Chapter 6 – with the exception of Article 6.2 (tax matters)

–Chapter 7

–Chapter 40

–Chapter 41

2. The date from which the above parts of the Agreement are to be provisionally applied shall be published in the Official Journal of the European Union by the General Secretariat of the Council.

Article 4

This Decision shall enter into force on the day of its adoption.

Done at Brussels,

(1)    OJ L 26, 31.1.2003.

(2)    JOIN/2017/019 final

(3)    The Agreements were amended in 2005, 2006, 2009 and lastly in 2022 (OJ C287/19 of 28 July 2022).

(4)    Chile is not a recipient of Official Development Aid in accordance with the criteria set out by the Development Assistance Committee of the OECD for the period of 2022 and 2023.

(5)     https://policy.trade.ec.europa.eu/analysis-and-assessment/sustainability-impact-assessments_en#chile

(6)     https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52017SC0173

EUROPEAN COMMISSION

Brussels, 5.7.2023

COM(2023) 431 final

ANNEX

to the

Proposal for a COUNCIL DECISION

on the signing, on behalf of the European Union, and provisional application of the Advanced Framework Agreement between the European Union and its Member States, of the one part, and the Republic of Chile, of the other part

ADVANCED FRAMEWORK AGREEMENT
BETWEEN THE EUROPEAN UNION AND ITS MEMBER STATES,
OF THE ONE PART,
AND THE REPUBLIC OF CHILE,
OF THE OTHER PART

PREAMBLE

THE KINGDOM OF BELGIUM,

THE REPUBLIC OF BULGARIA,

THE CZECH REPUBLIC,

THE KINGDOM OF DENMARK,

THE FEDERAL REPUBLIC OF GERMANY,

THE REPUBLIC OF ESTONIA,

IRELAND,

THE HELLENIC REPUBLIC,

THE KINGDOM OF SPAIN,

THE FRENCH REPUBLIC,

THE REPUBLIC OF CROATIA,

THE ITALIAN REPUBLIC,

THE REPUBLIC OF CYPRUS,

THE REPUBLIC OF LATVIA,

THE REPUBLIC OF LITHUANIA,

THE GRAND DUCHY OF LUXEMBOURG,

HUNGARY,

THE REPUBLIC OF MALTA,

THE KINGDOM OF THE NETHERLANDS,

THE REPUBLIC OF AUSTRIA,

THE REPUBLIC OF POLAND,

THE PORTUGUESE REPUBLIC,

ROMANIA,

THE REPUBLIC OF SLOVENIA,

THE SLOVAK REPUBLIC,

THE REPUBLIC OF FINLAND,

THE KINGDOM OF SWEDEN,

Contracting Parties to the Treaty on European Union and the Treaty on the Functioning of the European Union, hereinafter referred to as the "Member States",

and

THE EUROPEAN UNION,

   of the one part,

and

THE REPUBLIC OF CHILE, hereinafter referred to as "Chile",

   of the other part,

hereinafter jointly referred to as "the Parties",

CONSIDERING the strong cultural, political, economic and cooperation ties which unite them,

REAFFIRMING their commitment to democratic principles, human rights and fundamental freedoms, the rule of law and good governance, and to the achievement of sustainable development and tackling climate change, which constitute the basis for their partnership and cooperation,

SHARING the view that the proliferation of weapons of mass destruction and their means of delivery to both state and non-state actors represents one of the most serious threats to international peace and security,

MINDFUL of the significant contribution to strengthen those ties made by the Association Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Chile, of the other part, signed in Brussels on 18 November 2002,

EMPHASISING the comprehensive nature of their relationship and the importance of providing a coherent framework for its further promotion,

CONSIDERING their commitment to modernise the existing Association Agreement to reflect new political and economic realities and the advancements made in their partnership,

ACKNOWLEDGING the importance of a strong and effective multilateral system, based upon international law, in preserving peace, preventing conflicts and strengthening international security and in tackling common challenges,

AFFIRMING their commitment to strengthen cooperation on bilateral, regional and global issues of common concern and to use all available tools to promote activities designed to develop an active and reciprocal international cooperation,

WELCOMING the adoption and calling for the implementation of the Sendai Framework for Disaster Risk Reduction 2015 – 2030, adopted at the Third UN World Conference in Sendai on 18 March 2015, the Addis Ababa Action Agenda of the Third International Conference on Financing for Development, adopted at Addis Ababa on 13-16 July 2015, the Resolution 70/1 adopted by the General Assembly of the United Nations on 25 September 2015 containing the outcome document "Transforming our world: the 2030 Agenda for Sustainable Development and the 17 Sustainable Development Goals" ("2030 Agenda"), the Paris Agreement under the United Nations Framework Convention on Climate Change, done at Paris on 12 December 2015 ("Paris Agreement"), the New Urban Agenda, adopted during the UN Conference on Housing and Sustainable Urban Development (Habitat III) in Quito on 20 October 2016 ("New Urban Agenda") and the World Humanitarian Summit Commitments, adopted at the World Humanitarian Summit in Istanbul on 23-24 May 2016,

REAFFIRMING their commitment to promote sustainable development in its economic, social and environmental dimensions, their commitment to the development of international trade in such a way as to contribute to sustainable development in these three dimensions, which are recognised as deeply interlinked and mutually reinforcing, and their commitment to promote the achievement of the objectives of the 2030 Agenda,

REAFFIRMING their commitment to expand and diversify their trade relation in conformity with the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994 and the specific objectives and provisions set out in Part III of this Agreement,

DESIRING to strengthen their economic relations, in particular their trade and investment relations, by strengthening and improving market access, and contributing to economic growth, while remaining mindful of the need to raise awareness of the economic and social impact of environmental damage, unsustainable patterns of production and consumption and their associated impact on human well-being,

CONVINCED that this Agreement will create a climate conducive to the growth of sustainable economic relations between them, in particular in the trade and investment sectors which are essential to the realisation of economic and social development, technological innovation and modernisation,

RECOGNISING that the provisions of this Agreement protect investments and investors, and are intended to stimulate mutually beneficial business activity, without undermining the right of the Parties to regulate in the public interest within their territories,

RECOGNISING the close relationship between innovation and trade, as well as the relevance of innovation for economic growth and social development, and also affirming their interest to promote higher levels of cooperation on innovation, research, science, technology, transportation and other related fields as well as promoting the participation of public and private sectors,

AFFIRMING their commitment to strengthen cooperation in the fields of justice, freedom and security,

RECOGNISING the mutual benefits of enhanced cooperation in the areas of education, environmental matters, culture, research and innovation, employment and social affairs, health and other areas of common interest,

EXPRESSING their determination to continue strengthening their relationship through new cooperation agreements, as well as their determination that such cooperation be carried out to the benefit of third countries, as embodied in the Memorandum of Understanding for International Cooperation signed by the Parties in 2015, and by the continuous participation of Chile in the regional programmes of the European Union,

RECALLING the importance of the various agreements signed by the European Union and Chile, which have fostered political dialogue and cooperation across the sectoral areas of the relationship between the Parties, and increased trade and investment,

NOTING that in case the Parties decide, within the framework of this Agreement, to enter into specific agreements in the area of freedom, security and justice which may be concluded by the European Union pursuant to Title V of Part Three of the Treaty on the Functioning of the European Union ("TFEU"), the provisions of such future specific agreements would not bind Ireland unless the European Union, simultaneously with Ireland as regards their respective previous bilateral relations, notifies Chile that Ireland has become bound by such future specific agreements as part of the European Union in accordance with Protocol No 21 on the position of Ireland in respect of the area of freedom, security and justice, annexed to the Treaty on European Union ("TEU") and to the TFEU. Likewise, any subsequent internal measures of the European Union which is adopted pursuant to Title V of Part Three of the TFEU to implement this Agreement would not bind Ireland, unless Ireland has notified its wish to take part in such measures or accept them in accordance with Protocol No 21. Also noting that, such future specific agreements or subsequent internal measures of the European Union would fall within the scope of Protocol No 22 on the position of Denmark annexed to the TEU and the TFEU,

HAVE AGREED AS FOLLOWS:

PART I

GENERAL PRINCIPLES AND OBJECTIVES

CHAPTER 1

GENERAL PRINCIPLES AND OBJECTIVES

ARTICLE 1.1

Objectives of this Agreement

The objectives of this Agreement are to:

(a)    reaffirm the association between the Parties based on a strengthened partnership, reinforced political dialogue and enhanced cooperation on issues of mutual interest, including innovation in all applicable areas;

(b)    foster increased trade and investment between the Parties by expanding and diversifying their trade relations, which should contribute to higher economic growth and an improved quality of life; and

(c)    strengthen the existing cooperation relationship between the Parties, including international cooperation for sustainable development and fostering joint work, with the purpose of contributing to the implementation of the 2030 Agenda.

ARTICLE 1.2

General principles

1.    The Parties confirm their strong support for the principles of the Charter of the United Nations.

2.    Respect for democratic principles and human rights and fundamental freedoms, as laid down in the Universal Declaration of Human Rights, adopted by the UN General Assembly on 10 December 1948, and other relevant international human rights instruments to which the Parties are party and for the principle of the rule of law and good governance, which underpin the internal and international policies of both Parties constitutes an essential element of this Agreement.

3.    The Parties share the view that the proliferation of weapons of mass destruction and their means of delivery to both state and non-state actors pose a major threat to international peace and security.

4.    The Parties reaffirm their commitment to continue promoting sustainable development in all its dimensions, contributing to the attainment of internationally agreed sustainable development goals, including to cooperate to address global environmental challenges.

5.    The Parties confirm their commitment to mainstream gender equality and the empowerment of women and girls.

6.    The Parties reaffirm their support for the United Nations Declaration on the Rights of Indigenous Peoples, adopted on 13 September 2007, and their commitments to respect the cultural diversity and protect the rights of indigenous peoples.

7.    The Parties shall implement this Agreement based on shared values including the principles of dialogue, mutual respect, equal partnership, multilateralism, consensus and respect for international law.

ARTICLE 1.3

Definitions

For the purposes of this Agreement:

(a)    "Association Agreement" means the Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Chile, of the other part, signed in Brussels on 18 November 2002;

(b)    "Interim Trade Agreement" means the Interim Agreement on Trade between the European Union, of the one part, and the Republic of Chile, of the other part, to be concluded;

(c)    "third country" means a country or territory outside the territorial scope of application of this Agreement as set out in Article 41.2; and

(d)    "Vienna Convention on the Law of Treaties" means the Vienna Convention on the Law of Treaties, done at Vienna on 23 May 1969.

PART II

POLITICAL DIALOGUE AND COOPERATION

CHAPTER 2

POLITICAL DIALOGUE, FOREIGN POLICY, INTERNATIONAL PEACE
AND SECURITY, GOVERNANCE AND HUMAN RIGHTS

ARTICLE 2.1

Political dialogue

1.    The Parties shall strengthen their political dialogue and cooperation at all levels, through exchanges and consultations on bilateral, regional, international and multilateral issues with the purpose of consolidating their enhanced partnership.

2.    The political dialogue shall aim to:

(a)    promote the development of bilateral relations and strengthen their partnership;

(b)    strengthen cooperation on regional and global challenges and issues;

(c)    strengthen their institutional capabilities, including but not limited to the modernisation of the State, decentralisation and the promotion of interinstitutional cooperation.

3.    The political dialogue between the Parties may take place in the following forms, as mutually agreed:

(a)    consultations, meetings and visits at summit level;

(b)    consultations, meetings and visits at ministerial level;

(c)    regular senior officials meetings, including a High Level Political Dialogue;

(d)    sectoral dialogues, including through the exchange of missions and experts on issues of common interest;

(e)    exchanges of delegations and other contacts between the National Congress of Chile and the European Parliament.

ARTICLE 2.2

Countering proliferation of weapons of mass destruction

1.    The Parties consider that the proliferation of weapons of mass destruction ("WMD") and their means of delivery to both state and non-state actors represents one of the most serious threats to international stability and security. The Parties therefore agree to cooperate and to contribute to countering the proliferation of weapons of mass destruction and their means of delivery through full compliance with and national implementation of their existing obligations under international disarmament and non-proliferation treaties and agreements and other relevant international obligations. The Parties agree that this paragraph constitutes an essential element of this Agreement.

2.    The Parties furthermore agree to cooperate and to contribute to countering the proliferation of weapons of mass destruction and their means of delivery by:

(a)    taking steps to sign, ratify or accede to, as appropriate, and fully implement all other relevant international instruments;

(b)    establishing an effective system of national export controls, controlling the export as well as the transit of WMD-related goods, including end-use control on dual-use technologies and effective sanctions for breaches of export controls.

ARTICLE 2.3

Human rights, rule of law and good governance

1.    The Parties shall foster a regular meaningful, broad-based human rights dialogue.

2.    The Parties shall cooperate on the promotion and protection of human rights, including with regard to the ratification and implementation of international human rights instruments, and on the strengthening of democratic principles and the rule of law, promoting gender equality and combatting discrimination in all its forms and on all grounds.

3.    Such cooperation may include:

(a)    supporting the development and implementation of action plans on human rights;

(b)    promoting human rights, including through education and the media;

(c)    strengthening national and regional institutions related to human rights, the rule of law and good governance;

(d)    enhancing cooperation with the United Nations Human Rights Treaty Bodies and the special procedures of the Human Rights Council according to general principles of international human rights law;

(e)    enhancing coordination and cooperation within the human rights-related institutions of the United Nations and relevant regional and multilateral fora;

(f)    strengthening national, regional and decentralised capacity to apply democratic principles and practices, including the promotion of election processes consistent with international democratic standards;

(g)    reinforcing good, independent and transparent governance at the local, national, regional and global levels, promoting accountability and transparency of institutions and supporting participation of citizens and the involvement of civil society;

(h)    collaborating and coordinating, where appropriate, including in third countries, to reinforce democratic principles, human rights and the rule of law, which includes the existence of an independent judicial system, equality before the law, the access of people to an effective legal public support, and the right to fair trial, due process and access to justice;

(i)    fostering the universality of international human rights treaties and encouraging third parties to implement their obligations in this area;

(j)     working to ensure accountability for human rights violations and abuses and ensure access to remedy for victims of such violations and abuses.

ARTICLE 2.4

Gender equality and women's and girls' empowerment

1.    The Parties shall promote gender equality, the full enjoyment of all human rights by all women and girls and their empowerment. They acknowledge the necessity of gender equality and the empowerment of women and girls as a goal in its own right as well as driver for democracy, sustainable and inclusive development, peace and security. The Parties shall exchange best practices and explore further schemes of cooperation and potential synergies between respective initiatives such as policies and programmes, in line with international standards and commitments such as the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW), adopted by the UN General Assembly on 18 December 1979, the general recommendations made by the UN Committee on the Elimination of Discrimination against Women, the Beijing Declaration and Platform for Action, adopted at the Fourth World Conference of Women, held in Beijing from 4 to 15 September 1995, the Programme of Action, adopted at the International Conference on Population and Development, held in Cairo from 5 to 13 September 1994 and the outcome of their review conferences, the 2030 Agenda UN Security Council Resolution (UNSCR) 1325 (2000) and its subsequent resolutions on Women, Peace and Security and other international agreements addressing gender equality and women's and girls' human rights to which they are party.

2.    Such cooperation may include:

(a)    cooperating to achieve all Sustainable Development Goals, in particular Goal 5 and its targets;

(b)    promoting, protecting and fulfilling all human rights of all women and girls; preventing, combating and prosecuting all forms of violence, discrimination and harassment against women and girls in both public and private spheres and actively promoting human rights of women and girls according to the relevant international framework;

(c)    actively promoting the systematic mainstreaming of gender perspective; strengthening dialogue and cooperation on promoting gender equality and non-discrimination, social dialogue, protection and inclusion, the decent work agenda and employment policy;

(d)    supporting the development and implementation of a national action plan on UNSCR 1325 (2000), as well as the implementation of the Women, Peace and Security agenda which consists of UNSCR 1325 (2000) and its subsequent resolutions;

(e)    promoting women's political participation and leadership, as well as access to quality education, economic empowerment and leadership, and their increased participation in all areas of life, including political, social, economic and cultural spheres;

(f)    strengthening national and regional institutions through specific measures to address and handle issues related to violence against women and girls, including prevention of and protection from all forms of sexual and gender-based violence and harassment, through investigation and accountability mechanisms, provision of care and support to victims and promotion of conditions of safety and security for women and girls;

(g)    effectively ensuring that women's and girls' human rights are promoted, respected and protected, countering any type of discrimination and violence against them, including violence targeting women human rights defenders, ensuring access to justice and taking the necessary steps to end impunity;

(h)    enhancing cooperation with relevant bodies of the United Nations and other international organisations;

(i)    actively promoting gender analysis and the systematic integration of gender perspective in all matters related to peace and security while ensuring women's leadership and meaningful participation in peace processes, mediation efforts, conflict resolution and peace building as well as civilian and military missions and operations.

ARTICLE 2.5

International security and cyberspace

The Parties will reinforce their cooperation and the exchange of views in the field of cybersecurity and regarding the use of information and communication technologies (ICT) in the context of international peace and security, including on norms, principles of responsible behaviour of States, the adherence to existing international law in cyberspace, the development of confidence building measures and capacity building.

ARTICLE 2.6

Countering terrorism

1.    The Parties reaffirm the importance of the fight against terrorism and shall cooperate in the prevention and suppression of acts of terrorism in accordance with international law and their respective legislation and the rule of law. They shall do so in particular:

(a)    in the framework of full implementation of all relevant resolutions of the UN Security Council and the UN General Assembly, international conventions and instruments;

(b)    by promoting cooperation among UN Member States to effectively implement the UN Global Counter-Terrorism Strategy, adopted by the UN General Assembly on 8 September 2006;

(c)    by exchanging best practices in preventing radicalisation leading to violent extremism and countering terrorism;

(d)    by exchanging information on terrorist groups and their support networks, pursuant to national and international law, and supporting, when feasible, regional initiatives for law enforcement cooperation in the fight against terrorism, while fully respecting human rights, the right to privacy and the rule of law.

ARTICLE 2.7

Citizen security

1.    The Parties shall cooperate on citizen security. They acknowledge that citizen security transcends national and regional borders and requires a broader dialogue and cooperation with both a regional and a biregional dimension.

The Parties recognise the importance of the fight against organised crime and drug trafficking in enhancing citizen security. They commit to support biregional dialogues and cooperation on citizen security.

2.    The Parties may exchange evidence-based experiences and best practices on the design and implementation of policies related to preventing violence and crime, as well as on systems to measure and evaluate violence, crime and insecurity.

The Parties may exchange evidence-based best practices regarding the protection of victims of crimes in the context of citizen security.

3.    As regards prevention, the Parties may foster public policies aimed at preventing violence, with special emphasis on youth and gender.

4.    The Parties may exchange experiences and best practices in areas such as the promotion of a culture that fosters peace and non-violence, the observance of law, rehabilitation, reintegration into society, remedial justice. International standards and norms should be reflected in the law of the Parties governing the respective penitentiary systems.

ARTICLE 2.8

Small arms and light weapons and other conventional weapons

1.    The Parties recognise that the illicit manufacture, transfer and circulation of small arms and light weapons and other conventional weapons, including their ammunition, and their excessive accumulation, poor management, inadequately secured stockpiles and uncontrolled spread continue to pose a serious threat to peace and international security.

2.    The Parties agree to implement their respective obligations to deal with the illicit trade in small arms and light weapons and other conventional weapons, including their ammunition, under existing international agreements, the UN Protocol against the Illicit Manufacturing of and Trafficking in Firearms, their Parts and Components and Ammunition, adopted by UN Resolution 55/255 of 31 May 2001, and UN Security Council resolutions, as well as their commitments within the framework of other international instruments applicable in this area, such as the UN Programme of Action to Prevent, Combat and Eradicate the Illicit Trade in Small Arms and Light Weapons in All Its Aspects, adopted on 20 July 2001.

3.    The Parties recognise the importance of domestic control systems for the transfer of conventional arms in line with existing international standards and regulations. The Parties recognise the importance of applying such controls in a responsible manner, as a contribution to international and regional peace, security and stability, and to the reduction of human suffering, as well as to the prevention of diversion of conventional weapons.

4.    The Parties undertake in this regard to fully implement the Arms Trade Treaty, adopted in New York on 2 April 2013 and to cooperate with each other within the framework of that Treaty, including in promoting the universalisation and full implementation of that Treaty by all UN Member States.

5.    The Parties therefore undertake to cooperate and to ensure coordination, complementarity and synergy in their efforts to regulate or improve the regulation of international trade in conventional arms and to prevent, combat and eradicate the illicit trade in arms.

ARTICLE 2.9

International Criminal Court

1.    The Parties recognise that the most serious crimes of concern to the international community must not go unpunished and they shall endeavour to ensure that those crimes are effectively investigated and prosecuted by taking measures at the national level and by enhancing international cooperation, including with the International Criminal Court ("ICC").

2.    The Parties shall promote the universal ratification of, or accession to, the Rome Statute of the International Criminal Court ("Statute"), and shall work towards the effective domestic implementation of the Statute by States parties to the ICC. The Parties shall exchange, as appropriate, best practices on the adoption of their respective legislation and take measures to safeguard the integrity of the Statute.

ARTICLE 2.10

Cooperation in international crisis management

1.    The Parties reaffirm their commitment to cooperate in promoting peace and international security, including cooperation towards the development of a gender focus in the field of international peace and security.

2.    The Parties shall coordinate crisis management activities, including cooperation in crisis management operations.

3.    The Parties shall work to implement the Agreement between the European Union and the Republic of Chile establishing a framework for the participation of the Republic of Chile in European Union crisis management operations, signed in Brussels on 30 January 2014.

CHAPTER 3

JUSTICE, FREEDOM AND SECURITY

ARTICLE 3.1

Judicial cooperation

1.    The Parties shall enhance existing cooperation on mutual legal assistance and extradition based on relevant international agreements. The Parties shall strengthen existing mechanisms and, as appropriate, consider the development of new mechanisms to facilitate international cooperation in this area. Such cooperation shall include, as appropriate, accession to, and implementation of, the relevant international instruments, and closer cooperation with other relevant international legal cooperation networks.

2.    The Parties shall develop judicial cooperation in civil and commercial matters, in particular, as regards the negotiation, ratification and implementation of multilateral conventions on civil judicial cooperation, including the Conventions of the Hague Conference on Private International Law in the field of international legal cooperation and litigation as well as the protection of children.

3.    The Parties shall cooperate to promote the use of electronic means for the transmission of documents, as appropriate, as well as high standards of personal data protection, for the purpose of international judicial cooperation.

ARTICLE 3.2

World drug problem

1.    The Parties shall cooperate to ensure an integrated, balanced and evidence-based approach on drug issues with a view to:

(a)    implementing demand reduction initiatives and related measures, including prevention and treatment, and social reintegration as well as other health-related issues;

(b)    ensuring the availability of and access to controlled substances exclusively for medical and scientific purposes, while preventing their diversion;

(c)    implementing supply reduction initiatives and related measures, such as effective law enforcement and responses to drug-related crime, counter money laundering, illicit drug trade, including internet-facilitated drug trade, and promote judicial cooperation;

(d)    focusing on cross-cuttings issues: drugs and human rights, youth, children, gender, women and communities, including through measures for collaboration and cooperation towards fostering the development of programmes and actions for education and reintegration, allowing to reduce the demand for drugs and psychotropic substances;

(e)    exchanging information and best practices about evolving realities, trends and existing circumstances, emerging and persistent challenges and threats, including new psychoactive substances; this may include drug demand reduction and forensic analysis of material, such as seized drug precursors;

(f)    strengthening international cooperation, including to address the diversion of drug precursors, essential chemicals and products or preparations containing them used for the illicit production of narcotic drugs, psychotropic substances and new psychoactive substances;

(g)    strengthening alternative development, regional, interregional and international cooperation on development oriented balanced drug control policy.

2.    The Parties shall collaborate to attain these objectives, including, when possible, by encouraging third countries that have not already done so to ratify and implement existing international drug control conventions and protocols to which they are party. The Parties shall base their actions on their applicable laws and regulations, on commonly accepted principles in line with the relevant United Nations drug control conventions and on the recommendations set out in the Outcome Document of the 2016 UN General Assembly Special Session on the World Drug Problem, entitled "Our joint commitment to effectively addressing and countering the world drug problem", as the most recent international consensus on the world drug policy, in order to take stock of the implementation of the commitments made to jointly address and counter the world drug problem.

ARTICLE 3.3

International migration and asylum

1.    The Parties shall cooperate and exchange views within the framework of their respective laws, regulations and competences in the areas of migration, including regular and irregular migration, trafficking in persons and the smuggling of migrants, migration and development, asylum and international protection, return, readmission, integration, and visas and border management.

2.    The Parties shall cooperate, including through possible technical cooperation, on exchanging information and good practices related to policies, regulations, institutions and civil society, along with the sharing of data and statistics on migration.

3.    The Parties shall cooperate in order to prevent irregular migration and counter migrant smuggling. To this end:

(a)    Chile shall readmit any of its nationals illegally present on the territory of a Member State, on request by the latter and, unless otherwise provided by a specific agreement, without further formalities;

(b)    each Member State shall readmit any of its nationals illegally present on the territory of Chile, upon request by the latter and, unless otherwise provided by a specific agreement, without further formalities;

(c)    the Member States and Chile shall provide their nationals with appropriate travel documents for the purposes referred to in subparagraphs (a) and (b) or accept the use of the European travel documents for return;

(d)    the Parties shall mutually agree to negotiate a specific agreement defining obligations on readmission, including forms of evidence regarding nationality. The agreement may also include an obligation to readmit persons who are third country nationals, in accordance with the applicable law of the Parties.

4.    The Parties commit to enhance international cooperation on migration in all its dimensions, including within the framework of the United Nations, especially in addressing the root causes of irregular migration and forced displacement, while respecting national competences.

ARTICLE 3.4

Consular protection

The diplomatic and consular authorities of any represented Member State shall provide protection to any national of a Member State which does not have a permanent representation in Chile effectively in a position to provide consular protection in a given case, on the same conditions as to nationals of that Member State.

ARTICLE 3.5

Money laundering and the financing of terrorism

The Parties shall cooperate with a view to preventing and combating the use of their financial institutions and designated non-financial businesses and professions to finance terrorism and to launder the proceeds of criminal activities. To that end, they shall exchange information within the framework of their respective legislation and cooperate to ensure the effective and full implementation of the Financial Action Task Force (FATF) recommendations. Such cooperation may include, among others, the recovery, seizure, confiscation, tracing, identification and return of assets or funds derived from the proceeds of crime.

ARTICLE 3. 6

Law enforcement and the fight against corruption and transnational organised crime

1.    The Parties shall cooperate and exchange views on combatting transnational organised, economic and financial crime, drug trafficking and illicit drugs, trafficking in persons and other associated forms of exploitation, corruption, counterfeiting, smuggling, and illegal transactions through compliance with their mutual international obligations in this area, including as regards mutual legal assistance and effective cooperation in the recovery of assets or funds derived from criminal acts.

2.    The Parties will exchange evidence-based experiences and best practices about the design and implementation of policies related to the fight against corruption and transnational organised crime.

3.    The Parties shall develop a dialogue and cooperation on law enforcement, including through continuing strategic cooperation with Europol, as well as strategic judicial cooperation, including through Eurojust.

4.    The Parties shall endeavour to collaborate in international fora to promote as appropriate adherence to and the implementation of the UN Convention Against Transnational Organized Crime, adopted on 15 November 2000 by the UN Resolution 55/25 and its supplementing Protocols.

5.    The Parties shall promote the implementation of the UN Convention against Corruption, adopted on 31 October 2003 by the UN Resolution 58/4 and the Mechanism for the Review of Implementation of the UN Convention against Corruption established by the Conference of the States Parties to the UN Convention against Corruption in Doha, 9 13 November 2009 ("review mechanism"), including by adhering to principles of transparency and the participation of civil society in the review mechanism.

6.    The Parties recognise the importance of fighting corruption in international trade and investment and to this end agree on more detailed provisions laid down in the Protocol on the Prevention of and Fight against Corruption which is annexed to this Agreement.

7.    Regarding the fight against corruption, the Parties agree, in particular:

(a)    to exchange relevant information and best practices in matters such as integrity, public transparency and anti-corruption;

(b)    to exchange information and best practices including awareness raising campaigns and education methods about the fight against corruption.

ARTICLE 3.7

Cybercrime

1.    The Parties recognise that cybercrime is a global problem requiring a global response.

2.    The Parties will reinforce their cooperation to prevent and fight against cybercrime. For that purpose, they will exchange information and best practices in accordance with their respective laws and international commitments, such as the Council of Europe Convention on Cybercrime, signed in Budapest on 23 November 2001 ("Budapest Convention"), in a manner that fully respects human rights and within the limits of their responsibility.

3.    The Parties will exchange information on the education and training of investigators and other professionals or prosecutors specialised in computer related crimes and digital forensic science and may carry out joint training activities for their mutual benefit or of third parties.

4.    The Parties shall endeavour to work together where appropriate to provide assistance and support to other States in the development of appropriate laws, policies, practices, education and training, compatible with Budapest Convention and recognising it as the international standard in preventing and combating cybercrime.

ARTICLE 3.8

Personal data protection

1.    The Parties recognise the importance of protecting the fundamental rights to privacy and the protection of personal data. The Parties shall cooperate to ensure the respect of these fundamental rights including in the area of law enforcement and when preventing and combatting terrorism and other serious transnational crimes.

2.    The Parties shall cooperate to promote a high level of protection for personal data. Cooperation at the bilateral and multilateral levels may include capacity building, technical assistance, the exchange of information and expertise, and cooperation through regulatory counterparts in international bodies as mutually agreed by the Parties.

CHAPTER 4

SUSTAINABLE DEVELOPMENT

ARTICLE 4.1

Sustainable development

1.    The Parties shall promote sustainable development in its three dimensions – social, economic and environmental – in an inclusive and balanced manner through dialogue, joint action, the sharing of best practices, good governance at all levels, cohesive nationally owned sustainable development strategies and the mobilisation of financial resources, making the best possible use of existing and future instruments.

2.    The Parties shall address the challenges linked to achieving the Sustainable Development Goals by giving priority to each Party's needs and national ownership, taking into account the regional and local contexts, and building synergies and partnerships with relevant stakeholders in this area including civil society, local governments, the private sector, non-profit organisations and academia. While recognising the central role of governments in promoting development, the Parties will also cooperate to encourage the private sector, in particular small and medium-sized enterprises, to take account of sustainable development in its practices.

3.    The Parties recognise the importance of the means of implementation, including finance, transfer of technology, technical cooperation and capacity building, in the realisation and follow-up of the 2030 Agenda through multiple sources, including governments, civil society, the private sector and other actors. In this regard, they commit to continue to work in order to strengthen international cooperation, including by promoting the use of innovative tools with a view to achieving sustainable development.

4.    The Parties shall cooperate to improve sustainability in consumption and production patterns, and shall endeavour to take actions aimed at decoupling economic growth from environmental degradation, including through circular economy, public policies and business strategies.

5.    The Parties should promote the responsible, sustainable and efficient use of natural resources.

6.    The Parties should raise awareness of the economic and social costs of environmental damage and its associated impact on human well-being, including through the use of science-based evidence.

7.    The Parties shall hold a regular structured policy dialogue on sustainable development and the achievement of the Sustainable Development Goals to improve policy coordination on issues of common interest and the quality and effectiveness of that coordination.

8.    The Parties shall work together to mainstream gender considerations across policies and instruments.

9.    Development cooperation shall be carried out in line with the relevant internationally agreed principles and policies to which both Parties have adhered.

ARTICLE 4.2

International cooperation

1.    The Parties recognise the mutually benefitting nature of international cooperation and its value to promote sustainable development processes.

2.    The Parties will encourage triangular cooperation with third countries in matters of common interest in a manner that fully respects the beneficiaries' strategies and priorities. They promote the strengthening of regional integration within Latin America and the Caribbean and acknowledge the strategic importance of inclusive bi-regional cooperation.

ARTICLE 4.3

Environment

1.    The Parties agree on the need to protect the environment and conserve, restore and sustainably manage natural resources.

2.    The Parties will cooperate in particular in such matters as access rights on environmental matters, biodiversity and protected areas, land and soil, water, air quality, environmental monitoring, environmental impact assessment, waste management, extended producer responsibility, recycling and chemical substances management, transportation impact assessment and management.

3.    The Parties recognise the importance of global environmental governance, including the implementation of multilateral environmental agreements to which they are party and, as appropriate, resolutions of the United Nations Environment Assembly and other relevant fora, to tackle environmental challenges of common concern. Each Party reaffirms its commitment to implement the multilateral environmental agreements to which it is party.

4.    The Parties shall strengthen their cooperation on the protection of the environment and human health, and on mainstreaming environmental considerations in all sectors of cooperation, as appropriate, in particular as regards:

(a)    promoting good environmental governance in mutually agreed priority areas;

(b)    fostering the exchange of information, technical expertise and best practices in areas such as:

(i)    green and circular economy and best available techniques;

(ii)    conservation and sustainable use of biodiversity, including the mapping and assessment of ecosystems and their services, their valuation and mainstreaming of these objectives in other relevant policy areas;

(iii)    protection and sustainable management of forests;

(iv)    fight against illegal trade in wildlife, including timber and other biological resources;

(v)    sound management of chemicals and waste;

(vi)    water resources, soil and land use policy;

(vii)    air pollution and reduction of short-lived pollutants;

(viii)coastal and marine environment conservation and management;

(ix)    the social and economic impacts of the environmental degradation;

(x)    the environmental impact of economic activities and the opportunities of greening businesses;

(xi)    access to information, participation and justice in environmental matters;

(xii)    joint academic research in environmental matters.

ARTICLE 4.4

Climate change

1.    The Parties acknowledge that the urgent threat of climate change requires collective action for low-emission and climate-resilient development.

2.    The Parties recognise the importance of international rules and agreements in the area of climate change, in particular the United Nations Framework Convention on Climate Change, done at New York on 9 May 1992 ("UNFCCC"), the Paris Agreement, and the Kyoto Protocol to the United Nations Framework Convention on Climate Change, done at Kyoto on 11 December 1997.

3.    The Parties shall work together to strengthen their cooperation under the UNFCCC, to implement the Paris Agreement and their nationally determined contributions (NDCs).

4.    Such cooperation may include:

(a)    cooperating towards the implementation of pre-2020 commitments and actions to build mutual trust between the Parties;

(b)    facilitating further action by the Parties driven by their national debates and policy analysis;

(c)    supporting low greenhouse gas emission economic development in accordance with the Paris Agreement;

(d)    supporting all constructive dialogues and engagements under the UNFCCC, especially those created to assess the collective progress towards achieving the goals of the Paris Agreement, such as the global stocktake;

(e)    developing policy dialogue and cooperation in the implementation of the enhanced transparency framework established by the Paris Agreement, in mutually agreed priority areas including the enhancement of national capacities in order to achieve higher levels of transparency;

(f)    promoting bilateral dialogue and cooperation of mutual interest with the aim of supporting multilateral processes, as appropriate, that can have a significant impact on the reduction of greenhouse gas emissions from international maritime transport and aviation, in particular in the International Civil Aviation Organization and the International Maritime Organization;

(g)    promoting domestic climate policies and programmes, which support the objectives of the Paris Agreement to mitigate climate change, adapt to it and align finance flows, including through the goals and actions contained in the NDCs of the Parties;

(h)    supporting action to align finance flows with a pathway towards low greenhouse gas emissions and climate-resilient development, with a focus on inclusive climate finance, which targets the poorest and groups that are particularly vulnerable to the adverse effects of climate change, such as women and girls;

(i)    promoting a dialogue on strengthening adaptation policies and measures, including in matters related to finance for adaptation, evaluation of results and increase in resilience;

(j)    promoting synergies of climate action at all levels between the public administration, civil society organisations and private business and fostering participation of the private sector towards a low greenhouse gas emission and climate resilient economy;

(k)    promoting economic policy instruments for climate change action, such as carbon pricing, market-based instruments and carbon taxes, as appropriate;

(l)    enhancing the development and deployment of commercially viable low-emission and other climate-friendly technologies;

(m)    promoting global efforts to rationalise and phase out inefficient fossil fuel subsidies that encourage wasteful consumption, taking fully into account specific needs and conditions of developing countries and minimising the possible adverse impact on their development in a manner that protects the poor and the affected communities;

(n)    enhancing bilateral dialogue on other areas of climate policy that may arise and fostering the consideration of the cross-cutting approaches of the Paris Agreement and Agenda 2030.

ARTICLE 4.5

Sustainable energy

1.    The Parties recognise the importance of the energy sector to economic prosperity and international peace and stability and underline that the transformation of the energy sector is key to achieving the goals set out in Agenda 2030 and the Paris Agreement. They agree on the need to improve and diversify energy supplies, promote innovation, increase energy efficiency to ensure the access to safe, sustainable, environmentally sound and affordable energy. The Parties recognise that the energy transition will not be without cost in the regions and will support a just transition. The Parties shall work towards these objectives.

2.    The Parties shall maintain information exchanges on energy and collaborate bilaterally, regionally and multilaterally to support open and competitive markets, share best practices, promote science-based, transparent regulation, and discuss areas of cooperation on energy issues.

3.    Cooperation between the Parties pursuant to this Article shall be implemented with due regard to Article 15.14 in Part III, so as to ensure synergies.

ARTICLE 4.6

Ocean governance

1.    The Parties recognise the importance of the sustainable management of the oceans and seas, including the protection and preservation of marine environment, the oceans and climate nexus, the conservation and the sustainable use and responsible management of fisheries, aquaculture and other maritime activities and their contribution to providing environmental, economic and social opportunities for present and future generations.

2.    To this end, in a manner consistent with their obligations under international law, in particular the United Nations Conventions on the Law of the Sea, done at Montego Bay, on 10 December 1982, the Parties undertake to:

(a)    promote active engagement of all States to finalise current negotiations in a timely manner and conclude and implement an ambitious international legally binding instrument under the United Nations Convention on the Law of the Sea for the conservation and sustainable use of marine biodiversity in areas beyond national jurisdiction;

(b)    cooperate to achieve Sustainable Development Goal (SDG) 14 and other related Goals, including in relevant regional and multilateral bodies and processes;

(c)    contribute to strengthening international ocean governance including through filling regulatory and implementation gaps;

(d)    promote better cooperation and consultation, within and between competent international organisations, instruments and bodies towards strengthening ocean governance and promoting effective enforcement;

(e)    promote and effectively implement monitoring, control and surveillance measures, such as observer schemes, vessel monitoring systems, transhipment control, inspections at sea and port state control and associated sanctions according to their respective laws and regulations, aimed at the conservation of fish stocks and the prevention of overfishing;

(f)    maintain or adopt actions and cooperate to combat illegal, unreported and unregulated (IUU) fishing, including, where appropriate, the exchange of information on IUU activities in their waters and the implementation of policies and measures to exclude IUU products from trade flows and fish farming operations;

(g)    cooperate with, and where appropriate in, regional fisheries management organisations in which both Parties are members, observers or cooperating non-contracting parties, with the aim of achieving good governance;

(h)    reduce pressures on the oceans through the fight against marine pollution and marine litter, including from land-based sources, plastics and microplastics;

(i)    cooperate to develop ecosystems and area-based conservation measures and management tools, including marine protected areas, consistent with the law of each Party and with international law and based on the best available scientific information to protect and restore coastal and marine areas and resources;

(j)    encourage the strengthening of the safety and security of the oceans by exchanging best practices regarding coastguard functions and maritime surveillance, including through enhanced cooperation of relevant authorities;

(k)    promote area-based tools like ecosystem-based maritime spatial planning and integrated coastal zone management in order to sustainably manage and develop maritime activities;

(l)    cooperate to strengthen ocean research and data collection;

(m)    support marine research and science-based decisions for fisheries management and for other exploitation activities on marine resources;

(n)    cooperate to minimise the adverse effects of climate change in the ocean, coastlines and ecosystems, including through the mitigation of emissions of greenhouse gases-, in particular carbon dioxide, effective adaptation actions and support for the implementation of relevant international agreements and international actions;

(o)    promote the development of sustainable and responsible aquaculture, including with regard to the implementation of the objectives and principles contained in the Code of Conduct for Responsible Fisheries, adopted in Rome, Italy, by the Food and Agriculture Organization of the United Nations, on 31 October 1995;

(p)    exchange best practices on the sustainable development of selected maritime economic activities of interest to the Parties.

ARTICLE 4.7

Disaster risk reduction

1.    The Parties recognise the need to manage both domestic and global natural and man-made disaster risks.

2.    The Parties shall cooperate to improve prevention, mitigation, preparedness, response, and recovery measures in order to reduce disaster risk, foster a culture of prevention and increase the resilience of their societies, ecosystems and infrastructure, and shall work as appropriate at a bilateral, regional, and multilateral political level to improve global disaster risk reduction.

3.    The Parties undertake to promote the exchange of information and good practices on the implementation and monitoring of the Sendai Framework for Disaster Risk Reduction 2015-2030, adopted at the Third UN World Conference in Sendai, Japan, on 18 March 2015 through regional and global cooperation platforms, and in particular on the assessment of risk, implementation of disaster risk reduction plans at all levels, collection and use of disaster statistics and loss data, including on economic evaluation of disasters.

ARTICLE 4.8

Urban policy development

1.    The Parties recognise the importance of policies to promote sustainable urban development as a means to contribute effectively to the implementation of the objectives of the 2030 Agenda and the New Urban Agenda.

2.    The Parties shall promote cooperation and partnership, involving all the key actors in the field of sustainable urban development, in particular, on ways to address urban challenges in an integrated and comprehensive manner.

3.    The Parties shall develop, wherever possible, concrete opportunities for city-to-city cooperation on sustainable solutions to urban challenges, with a view to improving capacity building through exchanges of experience, practice and mutual learning.

ARTICLE 4.9

Cooperation in agriculture and rural development 1

1.    The Parties shall cooperate in agriculture and rural development with the common objective to enhance resilience and sustainability of the food production, sustainable agriculture and management of natural resources such as water and climate action, circular food systems, including prevention and reduction of food loss and waste, promotion of producer organisations, geographical indications, research and innovation, rural development policies and agricultural market outlook.

2.    The Parties acknowledge the efforts undertaken in international fora to enhance global food security and nutrition and sustainable agriculture and commit to actively engage in cooperation in those fora with a view to contributing, by 2030, to ending hunger and all forms of malnutrition.

3.    The Parties shall work together towards contribution to the achievement of Agenda 2030 in the agri-food sector, in particular Sustainable Development Goals (SDGs) 1, 2, 12, 15, 17 and other relevant SDGs.

4.    The Parties shall encourage and promote effective public, public-private and civil society partnerships, building on the experience and resourcing strategies of partnerships foreseen in SDG 17. To this end, the Parties shall endeavour to enhance bilateral cooperation and coordination related to agriculture and rural development based on the principle of their respective long-term sustainability goals, referred to under the European Union Green Deal, the European Union Farm to Fork Strategy and the European Union Biodiversity strategy, and the Chilean agrifood sustainability initiatives.

CHAPTER 5

ECONOMIC, SOCIAL AND CULTURAL PARTNERSHIP

ARTICLE 5.1

Enterprise and industry

1.    The Parties shall cooperate to promote a favourable environment for the development and improved competitiveness of small and medium-sized enterprises (SMEs) and cooperation as appropriate in the field of industrial policy. Such cooperation shall consist in:

(a)    promoting contacts between economic operators, encouraging joint investments and establishing joint ventures and information networks through existing horizontal programmes;

(b)    exchanging information and experiences on creating framework conditions for SMEs to improve their competitiveness and on procedures related to the setting up of SMEs;

(c)    facilitating the activities of SMEs of the Parties;

(d)    promoting corporate social responsibility and accountability and encouraging responsible business practices, including sustainable consumption and production.

2.    The Parties shall cooperate to facilitate relevant cooperation activities established by the private sector.

ARTICLE 5.2

Raw materials

1.    The Parties recognise that a transparent, market-based approach is the best way to create an environment favourable to investment in the raw materials sector.

2.    Based on mutual interest, the Parties shall promote cooperation on issues relating to raw materials within relevant regional or multilateral settings or through bilateral dialogue at the request of either Party. This cooperation shall aim to promote transparency in global markets for raw materials and contribute to sustainable development.

3.    Cooperation between the Parties pursuant to this Article shall be implemented with due regard to Article 15.14 in Part III, so as to ensure synergies.

ARTICLE 5.3

Responsible business conduct, and business and human rights

1.    The Parties shall support the development and implementation of National Action Plans on Business and Human Rights ensuring that effective human rights due diligence provisions are mentioned and encouraged on the Plans.

2.    Taking into account that States have a duty to protect human rights in their territory in relation to business activity, the Parties shall promote responsible business conduct in accordance with international standards endorsed or supported by the Parties under the UN Guiding Principles on Business and Human Rights, the Guidelines for Multinational Enterprises of the Organization for Economic Co-operation and Development (OECD), and the OECD General Due Diligence Guidance for Responsible Business Conduct, the Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy of the International Labour Organisation (ILO) and the 2030 Agenda.

ARTICLE 5.4

Employment and social issues

1.    The Parties, in accordance with the 2030 Agenda, recognise that the eradication of poverty in all its forms and dimensions, including extreme poverty, is the greatest challenge facing the world and constitutes an indispensable requirement for sustainable development. In that respect, they agree to exchange information on methods to measure poverty in order to support evidence-based policies.

2.    The Parties acknowledge that improving living standards, creating quality jobs and promoting social protection and decent work for all – women and men – should be at the heart of employment and social policies.

3.    The Parties shall respect, promote and realise the fundamental principles and rights at work set out in the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-Up, adopted in Geneva on 18 June 1998, the ILO Declaration on Social Justice for a Fair Globalization, adopted on 10 June 2008, and in the corresponding fundamental ILO Conventions.

4.    The Parties shall enhance cooperation, including between social partners in the field of employment and social affairs, and shall promote exchanges of best practices regarding employment, health and safety at work, labour inspections, undeclared work, social dialogue and social and labour protection, including the assessment of the impacts of the informal economy as well as the management of professional transitions.

5.    The Parties agree to establish a regular dialogue to accompany and review the progress of work in these areas of common interest and the design and effectiveness of their policies in these fields.

ARTICLE 5.5

Older persons and persons with disabilities

1.    The Parties commit themselves to work for the welfare, dignity and effective inclusion of vulnerable groups in their societies, as well as of those who encounter barriers to their participation in society on an equal basis with others, in particular older persons and persons with disabilities.

2.    The parties recognise the importance of promoting a positive ageing and accessibility on all levels through the life course. The Parties also recognise the importance of complying with the accessibility obligations under the UN Convention on the Rights of Persons with Disabilities, adopted on 13 December 2006.

3.    The Parties agree to cooperate in order to:

(a)    promote and develop actions to support or increase labour market opportunities for and the social inclusion of older persons and persons with disabilities;

(b)    ensure inclusive education and lifelong learning for persons with disabilities, in particular children and young people, as well as for older persons;

(c)    promote targeted actions with a focus on the inclusion of persons with mental and intellectual disabilities and mental health problems, as well as on their habilitation and rehabilitation;

(d)    identify and exchange good practices on assistive devices, including those which are used in the provision of care to foster independent living and which are usable for both older persons and persons with disabilities, including in situations of dependency;

(e)    improve the accessibility of products and services in a coherent way in order to ensure access on an equal basis and without discrimination against persons with disabilities or older persons.

ARTICLE 5.6

Youth

1.    The Parties recognise the importance of youth as a driver for growth and prosperity. In this regard, the Parties will emphasise the importance of the creation of employment and decent jobs for young people, as well as the development of projects aimed at increasing their civic participation.

2.    The Parties shall cooperate to:

(a)    facilitate the active participation of young people in civil society;

(b)    foster exchanges in the field of youth policy and non-formal education for young people and youth workers;

(c)    promote sustainable and inclusive development by engaging in a dialogue with a view to supporting awareness campaigns targeted at youth regarding human rights and non-discrimination.

3.    Within this framework, they will carry out joint work to fight bullying and violence at educational establishments.

ARTICLE 5.7

Culture

1.    The Parties shall cooperate in relevant international fora, in particular the United Nations Educational, Scientific and Cultural Organization (UNESCO), in order to pursue common objectives and to foster cultural diversity, including through implementation of the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions, adopted on 20 October 2005.

2.    The Parties shall promote closer dialogue and cooperation in the cultural and creative sectors, including with regard to emerging and new technologies and audiovisual media, bearing in mind the bilateral agreements existing with Member States, in order to enhance, inter alia, mutual understanding and knowledge of their respective cultures and exchanges on this area.

3.    The Parties shall endeavour to take appropriate measures to promote cultural exchanges and carry out joint initiatives in various cultural areas, including coproduction in the fields of media, film and television industries, using available cooperation instruments and frameworks.

4.    The Parties shall encourage intercultural dialogue between civil society organisations as well as individuals from the Parties.

ARTICLE 5.8

Research and innovation

1.    The Parties shall cooperate in the area of scientific research, technological development and innovation on the basis of common interest and mutual benefit, in compliance with their internal rules and provisions. This cooperation shall be aimed at promoting social and economic development, tackling global societal challenges, achieving scientific excellence, improving regional competitiveness and strengthening relations between the Parties, leading to a long-lasting partnership. The Parties shall foster policy dialogue and use their different instruments, such as the Agreement for scientific and technological cooperation between the European Community and the Republic of Chile, done at Brussels on 23 September 2002, in complementary ways.

2.    The Parties shall seek to:

(a)    improve conditions for mobility of researchers, scientists, experts, students and entrepreneurs and for movement of material and equipment across borders;

(b)    facilitate reciprocal access to each other's science technology and innovation programmes, research infrastructures and facilities, publications and scientific data;

(c)    increase cooperation in pre-normative research and standardisation;

(d)    promote common principles for fair and equitable treatment of intellectual property rights in research and innovation projects;

(e)    encourage policy dialogue on innovation, targeted at SMEs in particular, with a view to generating new goods and services, and stimulating technological innovation and entrepreneurship;

(f)    increase the number of joint applied research and development business projects that seek to generate innovative solutions to common problems and challenges;

(g)    foster networks and links between research and innovation institutions –such as universities and research centres and companies, in the Parties' regions, for the development of close-to-market activities;

(h)    support social and public innovation programmes aiming to improve the social development of the regions and in particular the quality of life of citizens;

(i)    promote cooperation and exchange of best practices, policies and strategies, including global challenges, between policy-makers, innovation agencies and other relevant stakeholders.

3.    The Parties shall promote the following activities, which shall involve government organisations, public and private research centres, higher-education institutions, innovation agencies and networks, as well as other stakeholders, including SMEs:

(a)    joint initiatives to raise awareness on science, technology, innovation and capacity-building programmes and opportunities for participating in each other's programmes;

(b)    joint meetings and workshops aimed at exchanging information, best practices and identifying areas for joint research;

(c)    joint and co-financed research and innovation actions, including thematic networks, in areas of common interest;

(d)    mutually recognised assessment and evaluation of scientific and innovation cooperation, and dissemination of the corresponding results.

ARTICLE 5.9

Polar cooperation

The Parties recognise the importance of dialogue and cooperation at bilateral and multilateral level in polar matters. Such cooperation shall be channelled through expert dialogue and exchange of best practices, including in the framework of Commission for the Conservation of Antarctic Marine Living Resources.

ARTICLE 5.10

Digital policy

1.    The Parties recognise that information and communication technologies (ICTs) enhance economic, educational and social development. The Parties shall exchange views on their respective policies in this field.

2.    The Parties shall therefore cooperate in ICT policies. Such cooperation may include:

(a)    exchanging views on the different aspects of the Digital Single Market strategy of the European Union, in particular electronic communications policies and regulation, including access to broadband services, the protection of privacy and personal data, data flows, data localisation requirements, e-government, open government, open data, internet security, e‑health, and the independence of regulatory authorities;

(b)    exchanging views on net neutrality, as a principle to promote a free and open internet, and the creation of and access to online services and applications for the benefit of all citizens;

(c)    promoting ICTs as means of social, cultural and economic development, social and digital inclusion and cultural diversity as well as an essential tool for stimulating connectivity in schools and developing research and academic networks;

(d)    developing the interconnection and interoperability of research networks, computing and scientific data infrastructures and services, and promoting such development within their regional context;

(e)    cooperating in the area of e-government and trust services such as electronic signature and electronic identity, with a focus on exchanging policy principles, information and good practices on the use of ICTs to modernise public administration and to promote high-quality public services and transparent management of public resources;

(f)    exchanging information on standards, conformity assessment and type approval, inter alia to facilitate trade;

(g)    promoting the exchange and training of specialists, in particular young professionals and women;

(h)    promoting digital skills.

ARTICLE 5.11

Education and higher education

1.    The Parties shall cooperate in the area of education with the aim to support the development of human capital, in particular on the higher education level.

2.    In order to support the quality and modernisation of higher education systems, the Parties shall:

(a)    promote the mobility of students, academics and administrative staff through existing or new programmes;

(b)    enhance capacities in higher education institutions;

(c)    improve mechanisms for recognition of qualifications and study periods abroad, in accordance with the law of each Party.

ARTICLE 5.12

Civil satellite navigation, Earth observation and other space activities

1.    The Parties recognise that space activities have a positive impact on economic, social and sustainable environmental development and industrial competitiveness.

2.    The Parties shall cooperate, in accordance with international conventions, and their respective law, on matters of common interest in the area of civil space activities, such as:

(a)    space research, including on satellite navigation and earth observation through the participation in Horizon Europe;

(b)    cooperation on global navigation satellite systems applications and services including in particular scientific research, industrial cooperation, trade and market development, application standards, certification and regulatory measures;

(c)    development of satellite augmentation systems, in particular for air transportation or augmentation systems, mutual protection of infrastructure of satellite navigation systems, cooperation on interoperability, compatibility and spectrum use;

(d)    earth observation and earth science, including cooperation in multilateral fora and in particular Group on Earth Observations ("GEO") and Committee on Earth Observation Satellite ("CEOS") to address societal challenges and to facilitate business and innovation partnerships on the earth observation in the framework of Copernicus component of the Union Space Program by identifying areas of common interest;

(e)    satellite communications.

ARTICLE 5.13

Tourism

1.    The Parties shall cooperate in the area of tourism with the aim to improve the exchange of information and establish best practices in order to ensure a balanced and sustainable development of tourism and to support the creation of jobs, economic development and improvement of quality of life.

2.    The Parties shall focus in particular on:

(a)    safeguarding and maximising the potential of natural and cultural heritage;

(b)    respecting the integrity and interests of local communities;

(c)    promoting cooperation between the regions of the Parties and the regions and municipalities of neighbouring countries;

(d)    promoting information exchange and cooperation for creative industries and innovation in the tourism sector.

ARTICLE 5.14

Statistics

1.    The Parties shall cooperate in the field of statistics.

2.    Such cooperation may include:

(a)    promoting the harmonisation of statistical methodologies to improve data comparability;

(b)    producing and disseminating official statistics and developing indicators;

(c)    exchanging knowledge and good practices between official institutions of Chile in charge of statistical matters and procedures and their counterparts in the European Union.

ARTICLE 5.15

Transport

1.    The Parties shall cooperate in the relevant areas of transport policy, including integrated transport policy, with a view to developing and supporting an efficient, sustainable, safe, secure and environmentally friendly transport system for both passengers and goods.

2.    Such cooperation shall aim to promote:

(a)    exchange of information on their respective transport policies, standards and best practices and other subjects of mutual interest;

(b)    interconnection and interoperability of networks;

(c)    a multimodal transport system approach;

(d)    investment friendly environment;

(e)    safety and security of transport systems;

(f)    environment-related transport issues;

(g)    low carbon or carbon free transport solutions, research and innovation, smart and digital solutions;

(h)    expert dialogue and cooperation within the international transport fora;

(i)    sustainable transport solutions including in relation to urban mobility; and

(j)    trade facilitation, increased efficiency and optimisation of transport and logistics operations through digitalisation and simplification of reporting requirements across all transport modes.

CHAPTER 6

OTHER AREAS

ARTICLE 6.1

Macroeconomic policies

The Parties shall cooperate and promote the exchange of information and views on macroeconomic policies and trends.

ARTICLE 6.2

Tax matters

The Parties recognise and commit themselves to implement the principles of good governance in the tax area, including the global standards on transparency, and exchange of information, and the minimum standards against the base erosion and profit shifting (BEPS), as well as eliminating harmful tax practices. The Parties will promote a level playing field and work towards improving international cooperation in the tax area in order to prevent tax avoidance and evasion.

ARTICLE 6.3

Consumer policy

The Parties recognise the importance of ensuring a high level of consumer protection and, to that end, shall endeavour to cooperate in the field of consumer policy. The Parties agree that such cooperation may involve to the extent possible:

(a)    exchanging information on their respective consumer protection frameworks, including on consumer laws, consumer product safety, consumer redress and the enforcement of consumer legislation;

(b)    encouraging the development of independent consumer associations and contacts between consumer representatives.

ARTICLE 6.4

Public health

The Parties agree to cooperate in public health matters, in particular as regards prevention and control of communicable diseases, preparedness to fight outbreaks of highly pathogenic diseases, the enforcement of the International Health Regulations (2005), adopted on 23 May 2005 by the World Health Assembly and combatting antimicrobial resistance.

ARTICLE 6.5

Cooperation in sport and physical activity

The Parties will cooperate in the field of sport and physical activity as a way to contribute to the development of an active and healthy lifestyle, including health enhancing physical activity promotion in all age groups, promote social roles and educational values of sport and fight against threats against sport, such as doping, match fixing, racism and violence.

CHAPTER 7

MODERNISATION OF THE STATE AND THE PUBLIC SERVICE, DECENTRALISATION,
REGIONAL POLICY AND INTERINSTITUTIONAL COOPERATION

ARTICLE 7.1

State modernisation

In the context of their political dialogue and cooperation, the Parties will work towards exchange experiences in matters related to the modernisation and decentralisation of the State and the public administration, drawing lessons from the best practices of the Parties in global organisational effectiveness and the existing legislation and institutional framework with the aim of achieving good governance, including the following:

(a)    recognition of the autonomy and the role of supreme audit institutions in promoting good governance at all levels by ensuring efficiency, accountability, effectiveness and transparency;

(b)    promotion of transparency and accountability in public policies and decision making towards their citizenry, and the strengthening of the role of civil society in this field;

(c)    promotion of a culture of integrity and probity in the public service that encompasses society as a whole, in collaboration with the private sector and civil society;

(d)    promotion, support and encouragement of innovation in the public sector, providing solutions to the problems and challenges of its different levels and areas of work, so that they generate public value in the innovation ecosystem and society.

ARTICLE 7.2

Regional policy and decentralisation

1.    The Parties recognise the importance of policies to promote balanced and sustainable regional and territorial development. The Parties acknowledge the importance of regions and of work with subnational governments, and how these can add important knowledge about public policies in line with the requirements of the future decentralisation of Chile.

2.    The Parties will cooperate, whenever possible, with a view to improving systems of governance at different levels, capacity building through exchanges of experience and practice and mutual learning, on sustainable solutions for territorial and regional development challenges, on policies aiming at the promotion of social, economic and territorial cohesion, including cross-border cooperation, on setting up and implementing regional policy and organising territorial development strategies and on partnership issues, planning and evaluation procedures and methods, regional innovation and smart specialisation policies.

3.    The Parties undertake to strengthen and expand, whenever possible, the dynamics and opportunities for collaboration between the regions of the European Union and the regions of Chile, through the design and execution of joint programmes and projects aimed at developing, inter alia, regional and territorial development.

4.    The Parties will seek to exchange experiences and good practices on the interrelations between decentralisation and regional policy implementation.

ARTICLE 7.3

Interinstitutional cooperation

1.    The Parties undertake to encourage and facilitate closer dialogue and cooperation between the institutions concerned in any of the areas included in this Agreement. For this purpose, the Parties will encourage contacts between the institutions of the Government of Chile and the public sector and other relevant institutions of Chile with their counterparts in the European Union to address the widest possible sectoral cooperation, which can include:

(a)    prevention of and fight against corruption;

(b)    organisational training and support;

(c)    technical assistance provided to institutions of Chile responsible for the generation, execution and evaluation of public policies and for the provision of information concerning such policies, including meetings of staff of the institutions of the European Union with counterparts from Chile;

(d)    regular exchange of information as deemed appropriate, including through the use of information communication technologies, and the development of information networks, while safeguarding the protection of personal data in all fields where data exchange is required;

(e)    exchange of information and good practices regarding the digitalisation of State procedures related to provision of services to citizens;

(f)    transfer of specialised knowledge;

(g)    preliminary studies and joint execution of projects involving proportionate financial contribution;

(h)    development of action plans including focal points, timetables and assessment mechanisms;

(i)    contribution to the generation of capabilities, competences and skills in the field of public innovation.

2.    The Parties, by mutual agreement, may add other areas of action to those referred to in paragraph 1.

(1)    To the extent that the matters covered by this Article are also covered by Chapter 14 the cooperation referred to in this Article will be conducted according to that Chapter.

EUROPEAN COMMISSION

Brussels, 5.7.2023

COM(2023) 431 final

ANNEX

to the

Proposal for a COUNCIL DECISION

on the signing, on behalf of the European Union, and provisional application of the Advanced Framework Agreement between the European Union and its Member States, of the one part, and the Republic of Chile, of the other part

PART III

TRADE AND TRADE RELATED MATTERS

CHAPTER 8

GENERAL AND INSTITUTIONAL PROVISIONS

SECTION A

GENERAL PROVISIONS

ARTICLE 8.1

Establishment of a free trade area

The Parties hereby establish a free trade area, in conformity with Article XXIV of GATT 1994 and Article V of GATS.

ARTICLE 8.2

Objectives

The objectives of this Part of this Agreement are:

(a)    the expansion and the diversification of trade in goods, in conformity with Article XXIV of GATT 1994, between the Parties through the reduction or elimination of tariff and non-tariff barriers to trade;

(b)    the facilitation of trade in goods, in particular through the provisions regarding customs and trade facilitation, standards, technical regulations, conformity assessment procedures, and sanitary and phytosanitary measures, while preserving the right of each Party to regulate to achieve public policy objectives;

(c)    the liberalisation of trade in services, in conformity with Article V of GATS;

(d)    the development of an economic climate which is conducive to increased investment flows, the improvement of the conditions of establishment on the basis of the principle of non-discrimination while preserving the right of each Party to adopt and enforce measures necessary to pursue legitimate policy objectives;

(e)    the facilitation of trade and investment between the Parties, including through the free transfer of current payments and capital movements;

(f)    the development of an environment favourable to investment by providing transparent, stable and predictable rules that guarantee fair treatment to investors and the establishment of a court system to solve investor-state disputes in an effective, fair and predictable manner;

(g)    the effective and reciprocal opening of public procurement markets of the Parties;

(h)    the promotion of innovation and creativity by ensuring the adequate and effective protection of intellectual property rights in accordance with the international obligations applicable between the Parties;

(i)    the promotion of conditions fostering undistorted competition, in particular with regard to trade and investment between the Parties;

(j)    the development of international trade in a manner that contributes to sustainable development in its economic, social and environmental dimensions; and

(k)    the establishment of an effective, fair and predictable dispute settlement mechanism to resolve disputes regarding the interpretation and application of this Part of this Agreement.

ARTICLE 8.3

Definitions of general application

For the purposes of this Part of this Agreement, Annexes 9, 10-A to 10-E, 13-A to 13-H, 15-A, 15‑B, 16-A, 16-B, 16-C, 17-A to 17-I, 19-A, 19-B, 19-C, 21-A, 21-B, 25, 28-A, 28-B, 29, 32-A, 32-B, 32-C, 38-A and 38-B and the Protocols to this Agreement:

(a)    "Agreement on Agriculture" means the Agreement on Agriculture in Annex 1A to the WTO Agreement;

(b)    "Anti-Dumping Agreement" means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade in Annex 1A to the WTO Agreement;

(c)    "customs duty" means any duty or charge of any kind imposed on or in connection with the importation of a good, not including any:

(i)    charge equivalent to an internal tax imposed in accordance with Article 9.4 of this Agreement;

(ii)    anti-dumping, special safeguard, countervailing or safeguard duty applied in conformity with GATT 1994, the Anti-Dumping Agreement, the Agreement on Agriculture, the SCM Agreement and the Safeguards Agreement, as appropriate; and

(iii)    fee or other charge imposed on or in connection with the importation that is limited in amount to the approximate cost of services rendered;

(d)    "CPC" means the Provisional Central Product Classification (Statistical Papers Series M No.77, Department of International Economic and Social Affairs, Statistical Office of the United Nations, New York, 1991);

(e)    "days" means calendar days, including weekends and holidays;

(f)    "existing" means in effect on the date of entry into force of this Agreement;

(g)    "GATS" means the General Agreement on Trade in Services in Annex 1B to the WTO Agreement;

(h)    "GATT 1994" means the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement;

(i)    "good of a Party" means a domestic good as that is understood in GATT 1994, and includes originating goods of that Party;

(j)    "Harmonized System" or "HS" means the Harmonized Commodity Description and Coding System, including its General Rules of Interpretation, Section Notes, Chapter Notes and Subheading Notes, developed by the World Customs Organization;

(k)    "heading" means the first four digits in the tariff classification number under the Harmonized System;

(l)    "juridical person" means any legal entity duly constituted or otherwise organised under applicable law, whether for profit or otherwise, and whether privately owned or publicly owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association;

(m)    "measure" means any measure in the form of a law, regulation, rule, procedure, decision, administrative action, requirement, practice or any other form;

(n)    "measure of a Party" means any measure adopted or maintained by: 1

(i)    governments and authorities at all levels;

(ii)    non-governmental bodies in the exercise of powers delegated by governments or authorities at all levels 2 ; or

(iii)    any entity which is in fact acting on the instructions of or under the direction or the control of a Party with regard to the measure 3 ;

(o)    "natural person" means:

(i)    for the EU Party, a national of a Member State, according to its law 4 ; and

(ii)    for Chile, a national of Chile, according to its law;

(p)    "originating good" means a good qualifying under the rules of origin set out in Chapter 10;

(q)    "person" means a natural person or a juridical person;

(r)    "personal data" means any information relating to an identified or identifiable natural person;

(s)    "Safeguards Agreement" means the Agreement on Safeguards in Annex 1A to the WTO Agreement;

(t)    "sanitary or phytosanitary measure" means any measure referred to in paragraph 1 of Annex A to the SPS Agreement;

(u)    "SCM Agreement" means the Agreement on Subsidies and Countervailing Measures in Annex 1A to the WTO Agreement;

(v)    "SPS Agreement" means the Agreement on the Application of Sanitary and Phytosanitary Measures in Annex 1A to the WTO Agreement;

(w)    "TBT Agreement" means the Agreement on Technical Barriers to Trade in Annex 1 to the WTO Agreement;

(x)    "TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property Rights in Annex 1C to the WTO Agreement; and

(y)    "WTO Agreement" means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994.

ARTICLE 8.4

Relation to the WTO Agreement and other existing agreements
falling within the scope of this Part of this Agreement

1.    The Parties affirm their rights and obligations with respect to each other under the WTO Agreement and other existing agreements falling within the scope of this Part of this Agreement to which they are party.

2.    Nothing in this Agreement shall be construed as requiring either Party to act in a manner which is inconsistent with its obligations under the WTO Agreement.

3.    In the event of any inconsistency between this Agreement and any existing agreement other than the WTO Agreement to which both Parties are party and which fall within the scope of this Part of this Agreement, the Parties shall immediately consult with each other with a view to finding a mutually satisfactory solution.

SECTION B

INSTITUTIONAL PROVISIONS

ARTICLE 8.5

Specific functions of the Joint Council acting in trade configuration

1.    When the Joint Council established pursuant to Article 40.1 addresses issues related to this Part of the Agreement, 5 it may:

(a)    adopt decisions to amend:

(i)    the tariff schedules in the Appendices 9-1 and 9-2 in order to accelerate tariff dismantling;

(ii)    Chapter 10 and Annexes 10-A to 10-E;

(iii)    Annexes 13-F and 13-G, and Appendix 13-E-1;

(iv)    Annexes 16-A, 16-D, 16-E, and paragraph 1 of Annex 16-B;

(v)    Annex 21-B;

(vi)    Annex 29;

(vii)    the definition of "subsidy" in Article 31.2(1) insofar as it relates to enterprises supplying services, with a view to incorporating the outcome of future discussions in the WTO or related plurilateral fora on that matter;

(viii)    Annex 32-A as regards the references to the law applicable in the Parties;

(ix)    Annex 32-B as regards the criteria to be included in the opposition procedure;

(x)    Annex 32-C as regards the geographical indications;

(xi)    Annexes 38-A and 38-B; and

(xii)    any other provision, annex, appendix or protocol, the amendment of which is provided for in this Part of this Agreement;

(b)    adopt decisions to issue interpretations of the provisions of this Part of the Agreement, which shall be binding on the Parties and all bodies established under this Part of the Agreement and the panels referred to in Chapters 33 and 38;

(c)    establish additional Sub-Committees and other bodies responsible for matters falling within the scope of this Part of the Agreement pursuant to Article 40.3(3); and

(d)    if it deems so appropriate, establish the rules of procedure of the Sub-Committees and other bodies established pursuant to Article 8.8 and subparagraph (c) of this paragraph.

2.    The agenda of a meeting of the Joint Council acting in trade configuration shall be established by the coordinators for this Part of the Agreement, pursuant to Article 8.7(2).

ARTICLE 8.6

Specific functions of the Joint Committee acting in trade configuration

1.    When the Joint Committee established pursuant to Article 40.2 addresses issues related to this Part of the Agreement, 6 it shall:

(a)    assist the Joint Council in the performance of its functions regarding trade and investment matters;

(b)    be responsible for the proper implementation of this Part of the Agreement; in this respect, and without prejudice to the rights established under Chapter 38, a Party may refer for discussion within the Joint Committee any issue relating to the application or interpretation of this Part of the Agreement;

(c)    oversee the further elaboration of the provisions of this Part of the Agreement as necessary and evaluate the results obtained from its application;

(d)    seek appropriate ways of preventing and solving problems, which might otherwise arise in areas covered by this Part of the Agreement;

(e)    supervise the work of all Sub-Committees established under Article 8.8 and Sub-Committees established under Article 40.3(3) performing tasks specific to Part III of this Agreement; and

(f)    examine any effect on this Part of the Agreement of the accession of a new Member State to the European Union.

2.    The Joint Committee acting in trade configuration may:

(a)    establish additional Sub-Committees and other bodies responsible for matters falling within the scope of this Part of the Agreement pursuant to Article 40.3(3);

(b)    adopt decisions to amend this Part of the Agreement pursuant to subparagraph (a) of Article 8.5(1) and to issue the interpretations referred to in subparagraph (b) of Article 8.5(1) in between meetings of the Joint Council, when the Joint Council cannot meet or as otherwise provided for in this Agreement; and

(c)    establish the rules of procedure of the Sub-Committees and other bodies, if it deems so appropriate, established pursuant to Article 8.8 and subparagraph (a) of this paragraph.

3.    The agenda of a meeting of the Joint Committee acting in trade configuration shall be established by the coordinators for this Part of the Agreement, pursuant to Article 8.7(2).

ARTICLE 8.7

Coordinators for this Part of the Agreement

1.    Each Party shall appoint a coordinator for this Part of the Agreement, within 60 days of the date of entry into force of this Agreement, and notify the other Party the contact details of that coordinator.

2.    The coordinators shall jointly establish the agenda and conduct all other necessary preparations for the meetings of the Joint Council, the Joint Committee, and the Sub-Committees and other bodies established pursuant to Article 8.8 or established under Article 40.3(3) performing tasks specific to Part III of this Agreement. The coordinators shall follow-up on the decisions of the Joint Council and the Joint Committee, acting in trade configuration, and on the decisions of the Sub-Committees in the cases provided for in Articles 17.39 and 25.20, as appropriate.

ARTICLE 8.8

Sub-Committees and other bodies specific to this Part of the Agreement

1.    The Parties hereby establish the following Sub-Committees:

(a)    the Sub-Committee on Anti-Corruption on Trade and Investment;

(b)    the Sub-Committee on Customs, Trade Facilitation and Rules of Origin;

(c)    the Sub-Committee on Financial Services;

(d)    the Sub-Committee on Intellectual Property;

(e)    the Sub-Committee on Public Procurement;

(f)    the Sub-Committee on Sanitary and Phytosanitary Measures;

(g)    the Sub-Committee on Services and Investment;

(h)    the Sub-Committee on Sustainable Food Systems;

(i)    the Sub-Committee on Technical Barriers to Trade;

(j)    the Sub-Committee on Trade in Goods; and

(k)    the Sub-Committee on Trade and Sustainable Development.

2.    The agenda of a meeting of the Sub-Committees and other bodies responsible for matters falling within the scope of this Part of the Agreement shall be established by the coordinators for this Part of the Agreement, pursuant to Article 8.7(2).

CHAPTER 9

TRADE IN GOODS

ARTICLE 9.1

Objective

The Parties shall progressively and reciprocally liberalise trade in goods in accordance with this Part of this Agreement.

ARTICLE 9.2

Scope

Except as otherwise provided in this Part of this Agreement, this Chapter applies to trade in goods of a Party.

ARTICLE 9.3

Definitions

For the purposes of this Chapter and Annex 9:

(a)    "Agreement on Import Licensing Procedures" means the Agreement on Import Licensing Procedures in Annex 1A to the WTO Agreement;

(b)    "consular transactions" means the procedure for obtaining from a consul of the importing Party in the territory of the exporting Party, or in the territory of a third party, a consular invoice or a consular visa for a commercial invoice, certificate of origin, manifest, shipper's export declaration or any other customs documentation connected with the importation of a good;

(c)    "Customs Valuation Agreement" means the Agreement on Implementation of Article VII of GATT 1994 in Annex 1A to the WTO Agreement;

(d)    "export licensing procedure" means an administrative procedure requiring the submission of an application or other documentation other than that generally required for customs clearance purposes, to the relevant administrative body or bodies as a prior condition for exportation from the territory of the exporting Party;

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

(f)    "remanufactured good" means a good classified in HS Chapters 84 to 90 or under heading 94.02, except a good classified under HS headings 84.18, 85.09, 85.10, 85.16 and 87.03 or subheadings 8414.51, 8450.11, 8450.12, 8508.1 and 8517.11, that:

(i)    is entirely or partially comprised of parts obtained from goods that have been used;

(ii)    has similar performance and working condition compared to an equivalent good in new condition; and

(iii)    is given the same warranty as an equivalent good in new condition;

(g)    "repair" means any processing operation undertaken on a good to remedy operating defects or material damage and entailing the re-establishment of the good to its original function or to ensure compliance with technical requirements for its use, without which the good could no longer be used in the normal way for the purposes for which it was intended; repair of a good includes restoration and maintenance, but does not include an operation or process that:

(i)    destroys the essential characteristics of a good, or creates a new or commercially different good;

(ii)    transforms an unfinished good into a finished good; or

(iii)    is used to improve or upgrade the technical performance of a good;

(h)    "staging category" means the timeframe for the elimination of customs duties ranging from zero to seven years, after which a good is free of customs duty, unless otherwise specified in the schedules in Annex 9.

ARTICLE 9.4

National treatment on internal taxation and regulation

Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994, including its Notes and Supplementary Provisions. To that end, Article III of GATT 1994 and its Notes and Supplementary Provisions are incorporated into and made part of this Agreement, mutatis mutandis.

ARTICLE 9.5

Reduction or elimination of customs duties

1.    Unless otherwise provided for in this Agreement, each Party shall reduce or eliminate customs duties on goods originating in the other Party in accordance with its schedule in Annex 9.

2.    For the purposes of paragraph 1, the base rate of customs duties shall be the one specified for each good in the schedules in Annex 9.

3.    If a Party reduces its applied most-favoured-nation customs duty rate ("MFN rate"), the schedule in Annex 9 of that Party shall apply to the reduced rates. If a Party lowers its applied MFN rate to a level below the base rate in relation to a particular tariff line, that Party shall calculate the preferential applicable rate effecting the tariff reduction on the lowered applied MFN rate, maintaining the relative margin of preference for that particular tariff line for as long as the applied MFN rate is lower than the base rate. The relative margin of preference for any given tariff line in each staging period corresponds to the difference between the base rate set out in the schedule in Annex 9 of that Party and the applied duty rate for that tariff line in accordance with that schedule, divided by that base rate, and expressed in percentage terms.

4.    On the request of a Party, the Parties shall consult each other in order to consider accelerating the reduction or elimination of customs duties set out in the schedules in Annex 9. Having regard to such consultation, the Joint Council may adopt a decision to amend Annex 9 to accelerate that tariff reduction or elimination.

ARTICLE 9.6

Standstill

1.    Unless otherwise provided for in this Part of this Agreement, a Party shall not increase any customs duty that is set as the base rate in Annex 9 or adopt any new customs duty on a good originating in the other Party.

2.    For greater certainty, a Party may raise a customs duty to the level set out in Annex 9 for the respective staging period following a unilateral reduction.

ARTICLE 9.7

Export duties, taxes and other charges

1.    A Party shall not introduce or maintain any duty, tax or other charge of any kind imposed on, or in connection with, the exportation of a good to the other Party; or any internal tax or other charge on a good exported to the other Party that is in excess of the tax or charge that would be imposed on like goods when destined for domestic consumption.

2.    Nothing in this Article shall prevent a Party from imposing on the exportation of a good a fee or charge that is permitted pursuant to Article 9.8.

ARTICLE 9.8

Fees and formalities

1.    Fees and other charges imposed by a Party on, or in connection with, the importation or exportation of a good of the other Party shall be limited in amount to the approximate cost of the services rendered, and shall not represent an indirect protection of domestic goods or a taxation of imports or exports for fiscal purposes.

2.    A Party shall not levy fees or other charges on, or in connection with, importation or exportation on an ad valorem basis.

3.    Each Party may impose charges or recover costs only where specific services are rendered, including the following:

(a)    attendance, where requested, by customs staff outside official office hours or at premises other than customs premises;

(b)    analyses or expert reports on goods and postal fees for the return of goods to an applicant, in particular in respect of decisions relating to binding information or the provision of information concerning the application of customs legislation;

(c)    the examination or sampling of goods for verification purposes, or the destruction of goods, where costs other than the cost of using customs staff are involved; or

(d)    exceptional control measures, where these are necessary due to the nature of the goods or a potential risk.

4.    Each Party shall promptly publish all fees and charges that it imposes in connection with importation or exportation in such a manner as to enable governments, traders and other interested parties to become acquainted with them.

5.    A Party shall not require consular transactions, including related fees and charges, in connection with the importation of any good of the other Party.

ARTICLE 9.9

Repaired goods

1.    A Party shall not apply a customs duty to a good, regardless of its origin, that re-enters its customs territory after that good has been temporarily exported from its customs territory to the customs territory of the other Party for repair.

2.    Paragraph 1 does not apply to a good imported in bond, into free-trade zones, or in similar status, that is then exported for repair and is not re-imported in bond, into free-trade zones, or in similar status.

3.    A Party shall not apply a customs duty to a good, regardless of its origin, imported temporarily from the customs territory of the other Party for repair. 7

ARTICLE 9.10

Remanufactured goods

1.    Unless otherwise provided for in this Part of this Agreement, a Party shall not accord to remanufactured goods of the other Party treatment that is less favourable than that which it accords to like goods in new condition.

2.    For greater certainty, Article 9.11 applies to import and export prohibitions or restrictions on remanufactured goods. If a Party adopts or maintains import and export prohibitions or restrictions on used goods, it shall not apply those measures to remanufactured goods.

3.    A Party may require that remanufactured goods be identified as such for distribution or sale in its territory and that such goods meet all applicable technical requirements that apply to like goods in new condition.

ARTICLE 9.11

Import and export restrictions

Article XI of GATT 1994 and its Notes and Supplementary Provisions are incorporated into and made part of this Part of this Agreement, mutatis mutandis. Accordingly, a Party shall not 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, including its Notes and Supplementary Provisions.

ARTICLE 9.12

Origin marking

If Chile applies mandatory country-of-origin marking requirements to goods of the EU Party, the Joint Committee may decide that goods marked "Made in EU", or bearing a similar marking in the local language, fulfil such requirements upon importation into Chile. This Article does not affect either Party's right to specify the type of products for which country-of-origin marking requirements are mandatory. Chapter 10 does not apply to this Article.

ARTICLE 9.13

Import licensing procedures

1.    Each Party shall ensure that all import licensing procedures applicable to trade in goods between the Parties are neutral in application and are administered in a fair, equitable, non-discriminatory and transparent manner.

2.    A Party shall only adopt or maintain import licensing procedures as a condition for importation into its territory from the territory of the other Party if other appropriate procedures to achieve an administrative purpose are not reasonably available.

3.    A Party shall not adopt or maintain any non-automatic import licensing procedure as a condition for importation into its territory from the territory of the other Party unless it is necessary to implement a measure that is consistent with this Part of this Agreement. A Party adopting such a non-automatic import licensing procedure shall indicate clearly to the other Party the measure being implemented through that procedure.

4.    Each Party shall adopt and administer any import licensing procedures in accordance with Articles 1, 2 and 3 of the Agreement on Import Licensing Procedures. To this end, Articles 1, 2 and 3 of that Agreement are incorporated into and made part of this Agreement, mutatis mutandis.

5.    A Party that adopts new import licensing procedures, or modifies existing import licensing procedures, shall notify the other Party within 60 days of the date of publication of such new import licensing procedures or modifications of existing import licensing procedures. The notification shall include the information specified in paragraph 3 of this Article and in Article 5(2) of the Agreement on Import Licensing Procedures. A Party shall be deemed to be in compliance with this provision if it has notified the relevant new import licensing procedure, or any modifications to existing import licensing procedures, to the Committee on Import Licensing established in accordance with Article 4 of the Agreement on Import Licensing Procedures, including the information specified in Article 5(2) of that Agreement.

6.    Upon request of a Party, the other Party shall promptly provide any relevant information, including the information specified in Article 5(2) of the Agreement on Import Licensing Procedures, regarding any import licensing procedure that it intends to adopt, has adopted or maintains, or any modification to existing import licensing procedures.

ARTICLE 9.14

Export licensing procedures

1.    Each Party shall publish any new export licensing procedure, or any modification to an existing export licensing procedure, in such a manner as to enable governments, traders and other interested parties to become acquainted with them. Such publication shall take place, where practicable, 30 days before the procedure or modification takes effect, and in any event no later than the date on which such procedure or modification takes effect.

2.    Each Party shall ensure that the publication of export licensing procedures includes the following information:

(a)    the texts of its export licensing procedures, or of any modifications that it makes to those procedures;

(b)    the goods subject to each export licensing procedure;

(c)    for each export licensing procedure, a description of the process for applying for an export licence and any criteria that an applicant must fulfil in order to be eligible to apply for an export licence, such as possessing an activity licence, establishing or maintaining an investment, or operating through a particular form of establishment in a Party's territory;

(d)    one or more contact points from which interested persons can obtain further information on the conditions for obtaining an export licence;

(e)    the administrative body or bodies to which an application or other relevant documentation must be submitted;

(f)    a description of any measure or measures that the export licensing procedure is designed to implement;

(g)    the period during which each export licensing procedure will be in effect, unless the procedure will remain in effect until withdrawn or revised in a new publication;

(h)    if the Party intends to use an export licensing procedure to administer an export quota, the overall quantity and, if applicable, the value of the quota and the opening and closing dates of the quota; and

(i)    any exemptions or exceptions that replace the requirement to obtain an export licence, information on how to request or use those exemptions or exceptions, and the criteria for granting them.

3.    Within 30 days of the date of entry into force of this Agreement, each Party shall notify the other Party of its existing export licensing procedures. A Party that adopts new export licensing procedures, or modifies existing export licensing procedures, shall notify the other Party within 60 days of the date of publication of those new export licensing procedures or modifications to existing export licensing procedures. The notification shall include the reference to the source or sources where the information required pursuant to paragraph 2 is published and include, where appropriate, the address of the relevant government Internet website or websites.

4.    For greater certainty, nothing in this Article requires a Party to grant an export licence, or prevents a Party from implementing its obligations or commitments under United Nations Security Council Resolutions, or under multilateral non-proliferation regimes and export control arrangements.

ARTICLE 9.15

Customs valuation

Each Party shall determine the customs value of goods of the other Party that are imported into its territory in accordance with Article VII of GATT 1994 and the Customs Valuation Agreement. To this end, Article VII of GATT 1994, including its Notes and Supplementary Provisions, and Articles 1 to 17 of the Customs Valuation Agreement, including its Interpretative Notes, are incorporated into and made part of this Agreement, mutatis mutandis.

ARTICLE 9.16

Preference utilisation

1.    For the purpose of monitoring the functioning of this Part of this Agreement and calculating preference utilisation rates, the Parties shall annually exchange import statistics for a period starting one year after the entry into force of this Agreement and expiring 10 years after the tariff elimination is completed for all goods according to the schedules in Annex 9. Unless the Joint Committee decides otherwise, that period shall be automatically extended for five years, and thereafter the Joint Committee may decide to extend it further.

2.    The exchange of import statistics referred to in paragraph 1 shall cover data pertaining to the most recent year available, including value and, where applicable, volume, at the tariff line level for imports of goods of the other Party benefitting from preferential duty treatment under this Part of this Agreement and for imports of those goods that received non-preferential treatment.

ARTICLE 9.17

Specific measures concerning the management of preferential treatment

1.    The Parties shall cooperate in preventing, detecting and combating breaches of customs legislation related to the preferential treatment granted under this Chapter, in accordance with their obligations under Chapter 10 and the Protocol to this Agreement on Mutual Administrative Assistance in Customs Matters.

2.    A Party may, in accordance with the procedure laid down in paragraph 3, temporarily suspend the relevant preferential treatment of the goods concerned when that Party has made a finding, based on objective, compelling and verifiable information, that the other Party has committed large-scale systematic breaches of customs legislation in order to obtain the preferential treatment granted under this Chapter, and has made a finding of:

(a)    a systematic lack or inadequacy of action by the other Party in verifying the originating status of goods and the fulfilment of the other requirements of the Protocol to this Agreement on Mutual Administrative Assistance in Customs Matters, when identifying or preventing contravention of the rules of origin;

(b)    a systematic refusal by the other Party to carry out subsequent verification of the proof of origin on request of the other Party or to communicate its results in time, or undue delay carrying out such verification or communication; or

(c)    a systematic refusal or failure by the other Party to cooperate or assist in compliance with its obligations under the Protocol to this Agreement on Mutual Administrative Assistance in Customs Matters in relation to the preferential treatment.

3.    The Party which has made a finding as referred to in paragraph 2 shall, without undue delay, notify the Joint Committee thereof and enter into consultations with the other Party within the Joint Committee with a view to reaching a solution acceptable to both Parties.

If the Parties fail to agree on a mutually acceptable solution within three months of the date of notification, the Party which has made the finding may decide to temporarily suspend the relevant preferential treatment of the goods concerned. A temporary suspension shall be notified to the Joint Committee without undue delay.

Temporary suspensions shall apply only for the period necessary to protect the financial interests of the Party concerned, and for no longer than six months. Where the conditions that gave rise to the initial suspension persist at the expiry of the six-month period, the Party concerned may decide to renew the suspension. Any temporary suspension shall be subject to periodic consultations within the Joint Committee.

4.    Each Party shall publish, in accordance with its internal procedures, notices to importers about any notification and decision concerning temporary suspensions as referred to in paragraph 3.

ARTICLE 9.18

Sub-Committee on Trade in Goods

The Sub-Committee on Trade in Goods established pursuant to Article 8.8(1) shall:

(a)    monitor the implementation and administration of this Chapter and Annex 9;

(b)    promote trade in goods between the Parties, including through consultations on improving market-access tariff treatment pursuant to Article 9.5(4) and other issues, as appropriate;

(c)    provide a forum to discuss and resolve any issues related to this Chapter;

(d)    promptly address barriers to trade in goods between the Parties, especially those related to the application of non-tariff measures, and, if appropriate, refer such matters to the Joint Committee for its consideration;

(e)    recommend to the Parties any modification or addition to this Chapter;

(f)    coordinate the exchange of data for preference utilisation or of any other information on trade in goods between the Parties that it may decide;

(g)    review any future amendments to the Harmonized System to ensure that each Party's obligations under this Part of this Agreement are not altered, and consult to resolve any related conflict;

(h)    perform the functions set out in Article 15.17.

CHAPTER 10

RULES OF ORIGIN AND ORIGIN PROCEDURES

SECTION A

RULES OF ORIGIN

ARTICLE 10.1

Definitions

For the purposes of this Chapter and Annexes 10-A to 10-E:

(a)    "classification" means the classification of a product or material under a particular chapter, heading or sub-heading of the Harmonized System;

(b)    "consignment" means products which are either sent simultaneously from one exporter to one consignee or covered by a single transport document covering their shipment from the exporter to the consignee or, in the absence of such a document, by a single invoice;

(c)    "customs authority" means:

(i)    for Chile, the National Customs Service; and

(ii)    for the EU Party, the services of the European Commission responsible for customs matters and the customs administrations and any other authorities of the Member States of the European Union responsible for the application and enforcement of customs law.

(d)    "exporter" means a person located in a Party who, in accordance with the laws and regulations of that Party, exports or produces the originating product and makes out a statement on origin;

(e)    "identical products" means products which in every respect correspond to those described in the product description; the product description on the commercial document used for making out a statement on origin for multiple shipments must be precise enough to clearly identify that product, but also the identical products to be subsequently imported based on that statement;

(f)    "importer" means a person who imports the originating product and claims preferential tariff treatment for it;

(g)    "material" means any substance used in the production of a product, including any ingredients, raw materials, components or parts;

(h)    "product" means the result of production, even if it is intended for later use as a material in the production of another product; and

(i)    "production" means any kind of working or processing, including assembly.

ARTICLE 10.2

General requirements

1.    For the purposes of applying the preferential tariff treatment by a Party to an originating good of the other Party in accordance with this Part of this Agreement, provided that the product meets all other applicable requirements set out in this Chapter, the following products shall be considered as originating in the other Party:

(a)    products wholly obtained in that Party as provided for in Article 10.4;

(b)    products produced exclusively from materials originating in that Party; and

(c)    products produced in that Party using non-originating materials provided that they meet the requirements set out in Annex 10-B.

2.    If a product has acquired originating status in accordance with paragraph 1, the non‑originating materials used in the production of that product shall not be considered non-originating when that product is incorporated as a material in another product.

3.    The acquisition of originating status shall be fulfilled without interruption in the territory of a Party.

ARTICLE 10.3

Cumulation of origin

1.    A product originating in a Party shall be considered as originating in the other Party if used as a material in the production of another product in that other Party, provided that the working and processing carried out goes beyond one or more of the operations referred to in Article 10.6.

2.    Materials classified in Chapter 3 of the Harmonized System originating in the countries referred to in subparagraph (b) of paragraph 4 and used in the production of canned tuna products classified in subheading 1604.14 of the Harmonized System, may be considered as originating in a Party provided that the conditions in subparagraphs (a) to (e) of paragraph 3 are fulfilled, and that that Party sends a notification for examination by the Sub-Committee referred to in Article 10.31.

3.    The Joint Committee may decide, following a recommendation by the Sub-Committee, that certain materials originating in the third countries 8 referred to in paragraph 4 of this Article may be considered as originating in a Party if used in the production of a product in that Party provided that:

(a)    each Party has a trade agreement in force that forms a free trade area with that third country, within the meaning of Article XXIV of GATT 1994;

(b)    the origin of the materials referred to in this paragraph is determined in accordance with the rules of origin applicable under:

(i)    the EU Party's trade agreement forming a free trade area with that third country, if the material concerned is used in the production of a product in Chile; and

(ii)    Chile's trade agreement forming a free trade area with that third country, if the material concerned is used in the production of a product in the EU Party;

(c)    an arrangement is in force between the Party and that third country on adequate administrative cooperation ensuring full implementation of this Chapter, including provisions on the use of appropriate documentation on the origin of materials, and that the Party notifies the other Party of that arrangement;

(d)    the production or processing of the materials undertaken in that Party goes beyond one or more of the operations referred to in Article 10.6; and

(e)    the Parties agree on any other applicable conditions.

4.    The third countries referred to in paragraph 3 are:

(a)    the Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama; and

(b)    the Andean countries of Colombia, Ecuador and Peru.

ARTICLE 10.4

Wholly obtained products

1.    The following products shall be considered as wholly obtained in a Party:

(a)    plants and vegetable products grown or harvested there;

(b)    live animals born and raised there;

(c)    products obtained from live animals raised there;

(d)    products obtained from hunting, trapping, fishing, gathering or capturing there, but not beyond the outer limits of that Party's territorial sea;

(e)    products obtained from slaughtered animals born and raised there;

(f)    products obtained from aquaculture there, if aquatic organisms, including fish, molluscs, crustaceans, other aquatic invertebrates and aquatic plants, are born or raised from seed stock such as eggs, roes, fry, fingerlings or larvae, by intervention in the rearing or growth processes to enhance production, such as regular stocking, feeding or protection from predators;

(g)    minerals or other naturally occurring substances, not included in subparagraphs (a) to (f), extracted or taken there;

(h)    products of sea fishing and other products taken from the sea outside any territorial sea by a vessel of that Party;

(i)    products made aboard a factory ship of that Party exclusively from products referred to in subparagraph (h);

(j)    products extracted by a Party or a person of that Party from marine soil or subsoil outside any territorial sea provided that they have rights to work that soil or subsoil;

(k)    waste or scrap derived from production there or from used products collected there, provided that those products are fit only for the recovery of raw materials; and

(l)    products produced there exclusively from those products specified in subparagraphs (a) to (k).

2.    The terms "vessel of a Party" and "factory ship of a Party" in subparagraphs (h) and (i) of paragraph 1 mean a vessel and a factory ship, respectively, which:

(a)    is registered in a Member State or in Chile;

(b)    sails under the flag of a Member State or of Chile; and

(c)    meets one of the following conditions:

(i)    it is to more than 50 % owned by natural persons of a Member State or of Chile; or

(ii)    it is owned by a juridical person which:

(A)    has its head office and its main place of business in a Member State or in Chile, and

(B)    is to more than 50 % owned by persons of one of those Parties.

ARTICLE 10.5

Tolerances

1.    If a non-originating material used in the production of a product does not meet the requirements set out in Annex 10-B, that product shall be considered as originating in a Party, provided that:

(a)    for all products 9 except those classified under Chapters 50 to 63 of the Harmonized System, the total value of non-originating materials does not exceed 10 % of the ex-works price of the product;

(b)    for products classified under Chapters 50 to 63 of the Harmonized System, tolerances apply as stipulated in Notes 6 to 8 of Annex 10-A.

2.    Paragraph 1 does not apply if the value or weight of non-originating materials used in the production of a product exceeds any of the percentages for the maximum value or weight of non-originating materials as specified in the requirements set out in Annex 10-B.

3.    Paragraph 1 does not apply to products wholly obtained in a Party within the meaning of Article 10.4. If Annex 10-B requires that the materials used in the production of a product are wholly obtained, paragraphs 1 and 2 apply.

ARTICLE 10.6

Insufficient working or processing

1.    Notwithstanding subparagraph (c) of Article 10.2(1), a product shall not be considered as originating in a Party if solely one or more of the following operations are conducted on non-originating materials in that Party:

(a)    preserving operations such as drying, freezing, keeping in brine or other similar operations, if the sole purpose is to ensure that the product remains in good condition during transport and storage;

(b)    breaking-up and assembly of packages;

(c)    washing, cleaning, removing dust, oxide, oil, paint or other coverings;

(d)    ironing or pressing of textiles and textile articles;

(e)    simple painting and polishing operations;

(f)    husking and partial or total milling of rice, polishing and glazing of cereals and rice;

(g)    operations to colour or flavour sugar or form sugar lumps, partial or total milling of crystal sugar in solid form;

(h)    peeling, stoning and shelling of fruits, nuts and vegetables;

(i)    sharpening, simple grinding or simple cutting;

(j)    sifting, screening, sorting, classifying, grading or matching;

(k)    simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;

(l)    affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging;

(m)    simple mixing of products, whether or not of different kinds, including mixing of sugar with any material;

(n)    simple assembly of parts of articles to constitute a complete article or disassembly of products into parts;

(o)    simple addition of water or dilution or dehydration or denaturation of products; or

(p)    slaughter of animals.

2.    For the purposes of paragraph 1, an operation shall be considered simple if neither special skills nor machines, apparatus or equipment especially produced or installed are needed for carrying out that operation.

ARTICLE 10.7

Unit of qualification

1.    For the purposes of this Chapter, the unit of qualification shall be the product which is considered as the basic unit when classifying the product under the Harmonized System.

2.    If a consignment consists of a number of identical products classified under the same heading of the Harmonized System, each individual product shall be taken into account when applying this Chapter.

ARTICLE 10.8

Accessories, spare parts and tools

1.    Accessories, spare parts and tools dispatched with a piece of equipment, machine, apparatus or vehicle, which are part of the normal equipment and included in the price thereof or which are not separately invoiced, shall be regarded as one with the piece of equipment, machine, apparatus or vehicle in question.

2.    Accessories, spare parts and tools referred to in paragraph 1 shall be disregarded in determining the origin of the product, except for the purposes of calculating the maximum value of non-originating materials, if a product is subject to a maximum value of non-originating materials as set out in Annex 10-B.

ARTICLE 10.9

Sets

Sets, as defined in General Rule 3 for the Interpretation of the Harmonized System, shall be regarded as originating in a Party if all their components are originating products. If a set is composed of originating and non-originating products, the set as a whole shall be regarded as originating in a Party, provided that the value of the non-originating products does not exceed 15 % of the ex-works price of the set.

ARTICLE 10.10

Neutral elements

In order to determine whether a product qualifies as originating in a Party, it is not necessary to determine the origin of the following elements, which might be used in the production of the product:

(a)    fuel, energy, catalysts and solvents;

(b)    equipment, devices and supplies used for testing or inspecting the products;

(c)    machines tools, dies and moulds;

(d)    spare parts and materials used in the maintenance of equipment and buildings;

(e)    lubricants, greases, compounding materials and other materials used in production or used to operate equipment and buildings;

(f)    gloves, glasses, footwear, clothing, safety equipment and supplies;

(g)    any other material that is not incorporated into the product but the use of which can be demonstrated to be part of the production of the product.

ARTICLE 10.11

Packaging and packing materials and containers

1.    If, under General Rule 5 for the Interpretation of the Harmonized System, packaging materials and containers in which a product is packed for retail sale are classified together with the product, those packaging materials and containers shall be disregarded in determining the origin of the product, except for the purposes of calculating the maximum value of non-originating materials if a product is subject to a maximum value of non-originating materials in accordance with Annex 10‑B.

2.    Packing materials and containers that are used to protect a product during transportation shall be disregarded in determining whether a product is originating in a Party.

ARTICLE 10.12

Accounting segregation for fungible materials

1.    Fungible originating and non-originating materials shall be physically segregated during storage in order for them to maintain their originating or non-originating status, as the case may be. Those materials may be used in the production of a product without being physically segregated during storage provided that an accounting segregation method is used.

2.    The accounting segregation method referred to in paragraph 1 shall be applied in conformity with a stock management method under accounting principles which are generally accepted in the Party. The accounting segregation method shall ensure that at any time the number of products which could be considered as originating in a Party does not exceed the number that would have been obtained by physical segregation of the stocks during storage.

3.    For the purposes of paragraph 1, "fungible materials" means materials that are of the same kind and commercial quality, with the same technical and physical characteristics, and which cannot be distinguished from one another once they are incorporated into the finished product.

ARTICLE 10.13

Returned products

If a product originating in a Party that is exported from that Party to a third country and that returns to that Party, it shall be considered as non-originating, unless it can be demonstrated to the satisfaction of the customs authority of that Party that the returning product:

(a)    is the same as that exported; and

(b)    has not undergone any operation other than that necessary to preserve it in good condition while in the third country or while being exported.

ARTICLE 10.14

Non-alteration

1.    An originating product declared for home use in the importing Party shall not, after exportation and prior to being declared for home use, be altered, transformed in any way or subjected to operations other than to preserve it in good condition or than adding or affixing marks, labels, seals or any other documentation to ensure compliance with specific domestic requirements of the importing Party.

2.    Storage or exhibition of a product may take place in a third country provided it remains under customs supervision in that third country.

3.    Without prejudice to Section B, the splitting of consignments may take place in the territory of a third country if it is carried out by the exporter or under its responsibility and provided that those consignments remain under customs supervision in the third country.

4.    In case of doubt as to whether the conditions provided for in paragraphs 1 to 3 are complied with, the customs authority of the importing Party may request the importer to provide evidence of compliance. Such evidence may be given by any means, including contractual transport documents such as bills of lading or factual or concrete evidence based on marking or numbering of packages or any evidence related to the product itself.

ARTICLE 10.15

Exhibitions

1.    Originating products sent for exhibition in a third country and sold after the exhibition for importation in a Party, shall benefit on importation in accordance with this Part of this Agreement provided that it is shown to the satisfaction of the customs authorities that:

(a)    an exporter has consigned these products from a Party to the third country in which the exhibition was held and has exhibited them there;

(b)    the products have been sold or otherwise disposed of by that exporter to a person in a Party;

(c)    the products have been consigned during the exhibition or immediately thereafter in the state in which they were sent for exhibition; and

(d)    the products have not, since they were consigned for exhibition, been used for any purpose other than demonstration at the exhibition.

2.    A statement on origin shall be made out in accordance with Section B and submitted to the customs authorities in accordance with the customs procedures of the importing Party. The name and address of the exhibition shall be indicated thereon.

3.    Paragraph 1 applies to any trade, industrial, agricultural or crafts exhibition, fair or similar public show or display, which is not organised for private purposes in shops or business premises with a view to the sale of foreign products, and during which the products remain under customs control.

4.    The customs authorities of the importing Party may require evidence that the products have remained under customs control in the country of exhibition, as well as additional documentary evidence of the conditions under which they have been exhibited.

SECTION B

ORIGIN PROCEDURES

ARTICLE 10.16

Claim for preferential tariff treatment

1.    The importing Party shall grant preferential tariff treatment to a product originating in the other Party within the meaning of this Chapter on the basis of a claim by the importer for preferential tariff treatment. The importer shall bear the responsibility for the correctness of the claim for preferential tariff treatment and for the compliance with the requirements set out in this Chapter.

2.    The claim for preferential tariff treatment shall be based on one of the following:

(a)    a statement on origin made out by the exporter in accordance with Article 10.17;

(b)    the importer' knowledge subject to the conditions set out in Article 10.19.

3.    The claim for preferential tariff treatment and the basis for that claim as referred to in paragraph 2 shall be included in the customs declaration, in accordance with the laws and regulations of the importing Party.

4.    An importer making a claim for preferential treatment based on a statement on origin in accordance with subparagraph (a) of paragraph 2 shall keep the statement and shall present it to the customs authority of the importing Party upon request.

ARTICLE 10.17

Statement on origin

1.    An exporter of a product shall make out a statement on origin on the basis of information demonstrating that the product is originating, including, if applicable, information on the originating status of materials used in the production of the product.

2.    The exporter shall be responsible for the correctness of the statement on origin made out and the information provided pursuant to paragraph 1. If the exporter has reason to believe that the statement on origin contains or is based on incorrect information, the exporter shall immediately notify the importer of any change affecting the originating status of the product. In this case, the importer shall correct the import declaration and pay any applicable customs duty owing.

3.    The exporter shall make out a statement on origin in one of the linguistic versions included in Annex 3-C on an invoice or on any other commercial document that describes the originating product in sufficient detail so as to enable its identification in the Harmonized System nomenclature. The importing Party shall not require the importer to submit a translation of the statement on origin.

4.    A statement on origin shall be valid for one year from the date it was made out.

5.    A statement on origin may be made out for:

(a)    a single shipment of one or more products into a Party; or

(b)    multiple shipments of identical products into a Party within the period specified in the statement on origin not exceeding 12 months.

6.    The importing Party shall, on request of the importer and subject to any requirements imposed by the importer Party, allow a single statement on origin to be used for unassembled or disassembled products, within the meaning of General Rule 2(a) of the Harmonized System, classified under Sections XV to XXI of the Harmonized System if imported by instalments.

ARTICLE 10.18

Minor discrepancies and minor errors

The customs authority of the importing Party shall not reject a claim for preferential tariff treatment due to minor discrepancies between the statement on origin and the documents submitted to the customs office or minor errors in the statement on origin.

ARTICLE 10.19

Importer's knowledge

1.    The importing Party may, in its laws and regulations, set conditions to determine which importers may base a claim for preferential tariff treatment on the importer´s knowledge.

2.    Notwithstanding paragraph 1, the importer's knowledge that a product is originating shall be based on information demonstrating that the product effectively qualifies as originating and meets the requirements set out in this Chapter to obtain originating status.

ARTICLE 10.20

Record-keeping requirements

1.    An importer claiming preferential tariff treatment for a product imported into a Party shall:

(a)    if the claim for preferential treatment is based on a statement on origin, keep the statement on origin made out by the exporter for a minimum of three years from the date of the claim of preference of the product; and

(b)    if the claim for preferential treatment is based on the importer's knowledge, keep the information demonstrating that the product meets the requirements set out in this Chapter to obtain originating status for a minimum of three years from the date of the claim for preferential treatment.

2.    An exporter who made out a statement on origin shall, for a minimum of four years following the making out of that statement on origin, keep copies of the statement on origin and all other records demonstrating that the product meets the requirements set out in this Chapter to obtain originating status.

3.    The records to be kept in accordance with this Article may be held in electronic form in accordance with the laws and regulations of the importing or exporting Party, as appropriate.

ARTICLE 10.21

Exemptions from the requirements regarding statements on origin

1.    Products sent as packages from private persons to private persons or forming part of the personal luggage of travellers shall be admitted as originating products, without a statement on origin being required provided that such products are not imported by way of trade and have been declared as meeting the requirements of this Chapter and that there is no doubt as to the veracity of that declaration.

2.    Imports which are occasional and consist solely of products for the personal use of the recipients or travellers or their families shall not be considered as imports by way of trade, if it is evident from the nature and quantity of the goods that no commercial purpose is intended, provided that the importation does not form part of a series of importations that may reasonably be considered to have been made separately for the purpose of avoiding the requirement for an statement on origin.

3.    The total value of the products referred to in paragraph 1 shall not exceed EUR 500 or its equivalent amount in the currency of the Party in the case of packages, or EUR 1 200 or its equivalent amount in the currency of the Party in the case of products forming part of the personal luggage of travellers.

ARTICLE 10.22

Verification

1.    The customs authority of the importing Party may verify the originating status of a product or whether the other requirements set out in this Chapter are met on the basis of risk assessment methods, which may include random selection. For the purposes of such verification the customs authority of the importing Party may send of a request for information to the importer who made the claim for preferential treatment pursuant to Article 10.16.

2.    The customs authority of the importing Party sending a request pursuant to paragraph 1 shall not request more than the following information in relation to the origin of a product:

(a)    the statement on origin if the claim for preferential treatment was based on a statement on origin; and

(b)    information pertaining to the fulfilment of origin criteria, which is:

(i)    if the origin criterion is "wholly obtained", the applicable category (such as harvesting, mining, fishing) and place of production;

(ii)    if the origin criterion is based on change in tariff classification, a list of all the non-originating materials including their tariff classification (in 2-, 4- or 6-digit format, depending on the origin criteria);

(iii)    if the origin criterion is based on a value method, the value of the final product as well as the value of all the non-originating materials used in the production;

(iv)    if the origin criterion is based on weight, the weight of the final product as well as the weight of the relevant non-originating materials used in the final product; and

(v)    if the origin criterion is based on a specific production process, a description of that specific process.

3.    When providing the requested information, the importer may add any other information that it considers relevant for the purposes of verification.

4.    If the claim for preferential tariff treatment is based on a statement on origin in accordance with subparagraph (a) of Article 10.16(2) issued by the exporter, the importer shall provide that statement on origin but may reply to the customs authority of the importing Party that the information referred to in subparagraph (b) of paragraph 2 of this Article cannot be provided.

5.    Where the claim for preferential tariff treatment is based on the importer's knowledge referred to in subparagraph (b) of Article 10.16(2), the customs authority of the importing Party conducting the verification may, after having requested information pursuant to paragraph 1 of this Article, send an additional request for information to the importer if that customs authority considers that additional information is required in order to verify the originating status of the product or whether the other requirements set out in this Chapter are met. The customs authority of the importing Party may request the importer for specific documentation and information, if appropriate.

6.    If the customs authority of the importing Party decides to suspend the granting of preferential tariff treatment to the products concerned while awaiting the results of a verification, it may offer the importer to release the products. As a condition for such release, the importing Party may require a guarantee or other appropriate precautionary measure. Any suspension of preferential tariff treatment shall be terminated as soon as possible after the customs authority of the importing Party has ascertained the originating status of the products concerned, or that the other requirements set out in this Chapter are met.

ARTICLE 10.23

Administrative cooperation

1.    In order to ensure the proper application of this Chapter, the Parties shall cooperate with each other, through their respective customs authorities, in order to verify the originating status of a product or whether the other requirements set out in this Chapter are met.

2.    If a claim for preferential tariff treatment is based on a statement on origin in accordance with subparagraph (a) of Article 10.16(2) the customs authority of the importing Party conducting the verification may, after having requested information from the importer pursuant to Article 10.22(1), send a request for information to the customs authority of the exporting Party within a period of two years following the date of the claim for preferential treatment, if the customs authority of the importing Party considers that additional information is needed in order to verify the originating status of the product or whether the other requirements set out in this Chapter are met. The customs authority of the importing Party may request the customs authority of the exporting Party for specific documentation and information, if appropriate.

3.    The customs authority of the importing Party shall include the following information in the request referred to in paragraph 2:

(a)    the statement on origin or a copy thereof;

(b)    the identity of the customs authority issuing the request;

(c)    the name of the exporter to be verified;

(d)    the subject and scope of the verification; and

(e)    if applicable, any relevant documentation.

4.    The customs authority of the exporting Party may, in accordance with the laws and regulations of that Party, conduct its verification by requesting documentation from the exporter and calling for any evidence, or by visiting the premises of the exporter to review records and observe the facilities used in the production of the product.

5.    Following the request referred to in paragraph 2, the customs authority of the exporting Party shall provide the customs authority of the importing Party with the following information:

(a)    the requested documentation, if available;

(b)    an opinion regarding the originating status of the product;

(c)    the description of the product subject to verification and the tariff classification relevant to the application of the rules of origin;

(d)    a description and explanation of the production process to support the originating status of the product;

(e)    information on the manner in which the verification of the originating status of the product pursuant to paragraph 4 was conducted; and

(f)    supporting documentation, if appropriate.

6.    The customs authority of the exporting Party shall not transmit information to the customs authority of the importing Party referred to in subparagraph (a) or (f) of paragraph 5 without the consent of the exporter.

7.    All the information requested, including any supporting documents and all other related information regarding verification should preferably be exchanged between the customs authorities of the Parties electronically.

8.    The Parties shall, via the coordinators designated in accordance with this Part of this Agreement, provide each other with the contact details of their respective customs authorities and any modification thereto within 30 days of such modification.

ARTICLE 10.24

Mutual assistance in the fight against fraud

In case of a suspected breach of this Chapter, the Parties shall provide each other with mutual assistance, in accordance with the Protocol to this Agreement on Mutual Administrative Assistance in Customs Matters.

ARTICLE 10.25

Denial of claims for preferential tariff treatment

1.    Subject to the requirements set out in paragraphs 3 to 5, the customs authority of the importing Party may deny a claim for preferential tariff treatment if:

(a)    within a period of three months following the request for information pursuant to Article 10.22(1):

(i)    no reply is provided by the importer;

(ii)    in cases where claim for preferential tariff treatment is based on a statement on origin in accordance with subparagraph (a) of Article 10.16(2), the statement on origin was not provided; or

(iii)    in cases where the claim for preferential tariff treatment is based on the importer's knowledge as referred to in subparagraph (b) of Article 10.16(2), the information provided by the importer is inadequate to confirm the originating status of the product;

(b)    within a period of three months following the request for additional information pursuant to Article 10.22(5):

(i)    no reply is provided by the importer; or

(ii)    the information provided by the importer is inadequate to confirm that the product is originating;

(c)    within a period of 10 months following the request for information pursuant to of Article 10.23(2):

(i)    no reply is provided by the customs authority of the exporting Party; or

(ii)    the information provided by the customs authority of the exporting Party is inadequate to confirm the originating status of the product.

2.    The customs authority of the importing Party may deny a claim for preferential tariff treatment if the importer which has made that claim fails to comply with other requirements set out in this Chapter than those relating to the originating status of products.

3.    If the customs authority of the importing Party has sufficient justification to deny a claim for preferential tariff treatment in accordance with paragraph 1 of this Article and where the customs authority of the exporting Party has provided an opinion pursuant to subparagraph (b) of Article 10.23(5) confirming the originating status of the products, the customs authority of the importing Party shall notify the customs authority of the exporting Party of its intention to deny the claim for preferential treatment within two months of the receipt of that opinion.

4.    If the notification referred to in paragraph 3 has been made, consultations shall be held at the request of either Party, within three months after the date of that notification. The time period for consultation may be extended on a case-by-case basis by mutual agreement between the customs authorities of the Parties. The consultation may take place in line with the procedure set by the Sub-Committee.

5.    At the expiry of the time period for consultation, the customs authority of the importing Party shall deny the claim for preferential tariff treatment only if it is not able to confirm the originating status of the product and after having granted the importer the right to be heard.

ARTICLE 10.26

Confidentiality

1.    Each Party shall maintain, in accordance with its laws and regulations, the confidentiality of information provided to it by the other Party pursuant to this Chapter, and shall protect that information from disclosure.

2.    Information obtained by the authorities of the importing Party shall only be used by those authorities for the purposes of this Chapter.

3.    Each Party shall ensure that confidential information collected pursuant to this Chapter is not used for purposes other than the administration and enforcement of decisions and determinations relating to products origin and customs matters, except with the permission of the person or Party who provided the confidential information.

4.    Notwithstanding paragraph 3, a Party may allow information collected pursuant to this Chapter to be used in any administrative, judicial or quasi-judicial proceedings initiated for failure to comply with customs-related laws and regulations implementing this Chapter. A Party shall notify the person or Party that provided the information concerned of any such use in advance.

ARTICLE 10.27

Refunds and claims for preferential tariff treatment after importation

1.    Each Party shall provide that an importer may make, after importation, a claim for preferential tariff treatment and for a refund of any excess duties paid for a product if:

(a)    the importer did not make a claim for preferential tariff treatment at the time of importation;

(b)    the claim is made no later than two years after the date of importation; and

(c)    the product concerned was eligible for preferential tariff treatment when it was imported into the territory of the Party.

2.    As a condition for preferential tariff treatment on the basis of a claim made pursuant to paragraph 1, the importing Party may require that the importer:

(a)    makes a claim for preferential tariff treatment in accordance with the laws and regulations of the importing Party;

(b)    provides the statement on origin, as appropriate; and

(c)    satisfies all other applicable requirements set out in this Chapter as if preferential tariff treatment had been claimed at the time of importation.

ARTICLE 10.28

Administrative measures and sanctions

1.    A Party shall impose administrative measures and sanctions where appropriate, in accordance with its respective laws and regulations, on a person which draws up a document, or causes a document to be drawn up, which contains incorrect information for the purposes of obtaining preferential tariff treatment to a product, or which does not comply with the requirements set out in:

(a)    Article 10.20;

(b)    Article 10.23(4) by not providing evidence or refusing a visit; or

(c)    Article 10.17(2) by not correcting a claim for preferential tariff treatment made in the customs declaration and paying the custom duty as appropriate, if the initial claim for preference was based on incorrect information.

2.    The Party shall take into account paragraph 3.6 of Article 6 of the WTO Agreement on Trade Facilitation in cases where an importer voluntarily discloses a correction to a claim for preferential treatment prior to receiving a verification request, in accordance with the laws and regulations of that Party.

SECTION C

FINAL PROVISIONS

ARTICLE 10.29

Ceuta and Melilla

1.    For the purposes of this Chapter, for the EU Party, the term "Party" does not include Ceuta and Melilla.

2.    Products originating in Chile shall, when imported into Ceuta and Melilla, in all respects be granted the same customs treatment under this Part of this Agreement as that which is granted to products originating in the customs territory of the European Union under Protocol 2 of the Act of Accession of the Kingdom of Spain and the Portuguese Republic to the European Union. Chile shall grant to imports of products covered by this Part of this Agreement and originating in Ceuta and Melilla the same customs treatment as that which is granted to products imported from and originating in the EU Party.

3.    The rules of origin and origin procedures under this Chapter apply mutatis mutandis to products exported from Chile to Ceuta and Melilla and to products exported from Ceuta and Melilla to Chile.

4.    Ceuta and Melilla shall be considered as a single territory.

5.    Article 10.3 applies to import and exports of products between the EU Party, Chile and Ceuta and Melilla.

6.    The exporter shall enter "Chile" and "Ceuta and Melilla" in field 3 of the text of the statement on origin in Annex 10-C, depending on the origin of the product.

7.    The customs authority of the Kingdom of Spain shall be responsible for the application of this Article in Ceuta and Melilla.

ARTICLE 10.30

Amendments

The Joint Council may adopt decisions to amend this Chapter and Annexes 10-A to 10-E, pursuant to subparagraph (a) of Article 8.1(6).

ARTICLE 10.31

Sub-Committee on Customs, Trade Facilitation and Rules of Origin

1.    The Sub-Committee on Customs, Trade Facilitation and Rules of Origin ("Sub-Committee"), established pursuant to Article 8.8(1), shall be composed of representatives of the Parties with responsibility for customs.

2.    The Sub-Committee shall be responsible for the effective implementation and application of this Chapter.

3.    For the purposes of this Chapter, the Sub-Committee shall have the following functions:

(a)    reviewing and making appropriate recommendations, as necessary, to the Joint Committee on:

(i)    the implementation and application of this Chapter; and

(ii)    any amendments to this Chapter and Annexes 10-A to 10-E proposed by a Party;

(b)    making suggestions to the Joint Committee concerning the adoption of explanatory notes to facilitate the implementation of this Chapter; and

(c)    considering any other matter related to this Chapter as agreed by the Parties.

ARTICLE 10.32

Products in transit or storage

The Parties may apply this Part of this Agreement to products which comply with this Chapter and which, on the date of entry into force of this Agreement, are either in transit or are in temporary storage in bonded warehouse or in free zones in the EU Party or in Chile, subject to the submission to the customs authorities of the importing Party of a statement on origin.

ARTICLE 10.33

Explanatory notes

Explanatory notes regarding the interpretation, application and administration of this Chapter are set out in Annex 10-E.

CHAPTER 11

CUSTOMS AND TRADE FACILITATION

ARTICLE 11.1

Objectives

1.    The Parties recognise the importance of customs and trade facilitation in the evolving global trading environment.

2.    The Parties recognise that international trade and customs instruments and standards are the basis for import, export and transit requirements and procedures.

3.    The Parties recognise that customs laws and regulations shall be non-discriminatory and that customs procedures shall be based upon the use of modern methods and effective controls to combat fraud, protect consumer health and safety and promote legitimate trade. Each Party should periodically review its customs laws, regulations and procedures. The Parties also recognise that their customs procedures shall be no more administratively burdensome or trade restrictive than necessary to achieve legitimate objectives and that they shall be applied in a manner that is predictable, consistent and transparent.

4.    The Parties agree to reinforce their cooperation with a view to ensuring that the relevant customs laws, regulations and procedures, as well as the administrative capacity of the relevant administrations, fulfil the objectives of promoting trade facilitation while ensuring effective customs control.

ARTICLE 11.2

Definitions

For the purposes of this Chapter "customs authority" means:

(a)    for Chile, the Servicio Nacional de Aduanas (National Customs Service), or its successor; and

(b)    for the EU Party, those services of the European Commission responsible for customs matters and the customs administrations and any other authorities in the Member States responsible for the application and enforcement of customs laws and regulations.

ARTICLE 11.3

Customs cooperation

1.    The Parties shall cooperate on customs matters between their respective customs authorities in order to ensure that the objectives set out in Article 11.1 are attained.

2.    The Parties shall develop cooperation, including by:

(a)    exchanging information concerning customs laws and regulations and their implementation, and customs procedures, particularly in the following areas:

(i)    simplification and modernisation of customs procedures;

(ii)    enforcement of intellectual property rights by the customs authorities;

(iii)    facilitation of transit movements and transhipment;

(iv)    relations with the business community; and

(v)    supply chain security and risk management;

(b)    working together on the customs-related aspects of securing and facilitating international trade supply chains in accordance with the SAFE Framework of Standards to Secure and Facilitate Global Trade of the World Customs Organization (hereinafter referred to as "WCO") adopted in June 2005;

(c)    considering the development of joint initiatives relating to import, export and other customs procedures, including the exchange of best practices and technical assistance, and ensuring the provision of an effective service to the business community; such cooperation may include exchanges on customs laboratories, the training of customs officers and on new technologies for customs controls and procedures;

(d)    strengthening their cooperation in the field of customs in international organisations such as the WTO and the WCO;

(e)    establishing, if relevant and appropriate, the mutual recognition of authorised economic operator programmes, including equivalent trade facilitation measures;

(f)    carrying out exchanges on risk management techniques, risk standards and security controls, in order to establish, to the extent practicable, minimum standards for risk management techniques and related requirements and programmes;

(g)    endeavouring to harmonise their data requirements for import, export and other customs procedures, by implementing common standards and data elements in accordance with the WCO Data Model;

(h)    sharing their respective experiences in developing and deploying their single window systems, and, if appropriate, developing common sets of data elements for those systems;

(i)    maintaining a dialogue between their respective policy experts to promote the utility, efficiency, and applicability of advance rulings for customs authorities and traders; and

(j)    exchanging, if relevant and appropriate, through a structured and recurrent communication between their customs authorities, certain categories of customs-related information for specific purposes, namely improving risk management and the effectiveness of customs controls, targeting goods at risk in terms of revenue collections or safety and security, and facilitating legitimate trade; such exchange shall be without prejudice to exchanges of information that may take place between the Parties in accordance with the Protocol to this Agreement on Mutual Administrative Assistance in Customs Matters.

3.    Any exchange of information between the Parties under this Chapter shall be subject, mutatis mutandis, to the confidentiality of information and personal data protection requirements set out in Article 12 of the Protocol to this Agreement on Mutual Administrative Assistance in Customs Matters, as well as to any confidentiality and privacy requirements set out in the laws and regulations of the Parties.

ARTICLE 11.4

Mutual administrative assistance

The Parties shall provide each other with mutual administrative assistance in customs matters in accordance with the Protocol to this Agreement on Mutual Administrative Assistance in Customs Matters.

ARTICLE 11.5

Customs laws, regulations and procedures

1.    Each Party shall ensure that its customs laws, regulations and procedures are:

(a)    based upon international instruments and standards in the area of customs and trade, including the International Convention on the Harmonized Commodity Description and Coding System done at Brussels on 14 June 1983, as well as the SAFE Framework of Standards to Secure and Facilitate Global Trade of the WCO and the WCO Data Model, and if applicable, the substantive elements of the Revised Kyoto Convention on the Simplification and Harmonisation of Customs Procedures done at Kyoto on the 18 May 1973 and adopted by the World Customs Organization Council in June 1999;

(b)    based upon the protection and facilitation of legitimate trade through effective enforcement of and compliance with legislative requirements; and

(c)    proportionate and non-discriminatory to avoid unnecessary burdens on economic operators, provide for further facilitation for operators with high levels of compliance, including favourable treatment with respect to customs controls prior to the release of goods, and ensure safeguards against fraud and illicit or damaging activities.

2.    In order to improve working methods, as well as to ensure non-discrimination, transparency, efficiency, integrity and accountability in custom operations, each Party shall:

(a)    simplify and review requirements and formalities, if possible, with a view to the rapid release and clearance of goods;

(b)    work towards the further simplification and standardisation of data and documentation required by customs and other agencies in order to reduce the time and costs burdens for operators, including small and medium-sized enterprises; and

(c)    ensure that the highest standards of integrity be maintained through the application of measures reflecting the principles of the relevant international conventions and instruments in this field.

ARTICLE 11.6

Release of goods

Each Party shall ensure that its customs authorities, border agencies or other competent authorities:

(a)    provide for the prompt release of goods within a period no longer than required to ensure compliance with its customs and other trade-related laws and regulations and formalities;

(b)    provide for advance electronic submission and processing of documentation and any other required information prior to the arrival of the goods;

(c)    allow for the release of goods prior to the final determination of customs duties, taxes, fees and charges, subject to the provision of a guarantee, if required by its laws and regulations, in order to secure their final payment; and

(d)    give appropriate priority to perishable goods when scheduling and performing any examinations that may be required.

ARTICLE 11.7

Simplified customs procedures

Each Party shall adopt or maintain measures allowing operators that are fulfilling criteria specified in its laws and regulations to benefit from further simplification of customs procedures. Such measures may include customs declarations containing reduced sets of data or supporting documents, or periodical customs declarations for the determination and payment of customs duties and taxes covering multiple imports within a given period after the release of those imported goods, or other procedures that provide for the expedited release of certain shipments.

ARTICLE 11.8

Authorised economic operators

1.    Each Party shall establish or maintain a trade facilitation partnership programme for economic operators who meet specified criteria, (hereinafter referred to as "authorised economic operators").

2.    The specified criteria to qualify as authorised economic operators shall be related to compliance, or the risk of non-compliance, with requirements specified in laws, regulations or procedures of each Party. The specified criteria shall be published and it may include:

(a)    the absence of any serious infringement or repeated infringements of customs legislation and taxation rules, including no record of serious criminal offences relating to the economic activity of the applicant;

(b)    the demonstration by the applicant of a high level of control of its operations and of the flow of goods, by means of a system of managing commercial and, where appropriate, transport records, which allows appropriate customs controls;

(c)    financial solvency, which shall be deemed to be proven if the applicant has good financial standing, which enables it to fulfil its commitments, with due regard to the characteristics of the type of business activity concerned;

(d)    proven competences or professional qualifications directly related to the activity carried out; and

(e)    appropriate security and safety standards.

3.    The specified criteria referred to in paragraph 2 shall not be designed or applied so as to afford or create arbitrary or unjustifiable discrimination between economic operators where the same conditions prevail and shall allow the participation of small and medium-sized enterprises.

4.    The trade facilitation partnership programme referred to in paragraph 1shall include the following benefits:

(a)    low documentary and data requirements, as appropriate;

(b)    lower rate of physical inspections or expedited examinations, as appropriate;

(c)    simplified release procedures and rapid release time, as appropriate;

(d)    use of guarantees, including, if applicable, comprehensive guarantees or reduced guarantees; and

(e)    control of the goods at the premises of the authorised economic operator or another place authorised by customs authorities.

5.    The trade facilitation partnership programme referred to in paragraph 1 may also include additional benefits, such as:

(a)    deferred payment of duties, taxes, fees and charges;

(b)    a single customs declaration for all imports or exports in a given period; or

(c)    availability of a dedicated contact point to provide assistance in customs matters.

ARTICLE 11.9

Data and documentation requirements

1.    Each Party shall ensure that import, export and transit formalities, data and documentation requirements are:

(a)    adopted and applied with a view to the rapid release of goods, provided the conditions for the release are fulfilled;

(b)    adopted and applied in a manner that aims to reduce the time and cost of compliance for traders or operators;

(c)    the least trade-restrictive alternative, if two or more alternatives were reasonably available for fulfilling the policy objective or objectives in question; and

(d)    not maintained, including parts thereof, if no longer required.

2.    Each Party shall apply common customs procedures and use uniform customs documents for the release of goods throughout its customs territory.

ARTICLE 11.10

Use of information technology and electronic payment

1.    Each Party shall use information technologies that expedite procedures for the release of goods in order to facilitate trade between the Parties.

2.    Each Party shall:

(a)    make available, by electronic means, a customs declaration that is required for the import, export or transit of goods;

(b)    allow a customs declaration to be submitted in electronic format;

(c)    establish a means of providing for the electronic exchange of customs information with its trading community;

(d)    promote the electronic exchange of data between operators and customs authorities, as well as other related agencies; and

(e)    use electronic risk management systems for assessment and targeting that enable its customs authorities to focus their inspections on high-risk goods and that facilitate the release and movement of low-risk goods.

3.    Each Party shall adopt or maintain procedures allowing the option of electronic payment for duties, taxes, fees and charges collected by customs authorities incurred upon importation and exportation.

ARTICLE 11.11

Risk management

1.    Each Party shall adopt or maintain a risk management system for customs control.

2.    Each Party shall design and apply risk management in a manner as to avoid arbitrary or unjustifiable discrimination, or disguised restrictions on international trade.

3.    Each Party shall concentrate customs control and other relevant border controls on high-risk consignments and expedite the release of low-risk consignments. Each Party may also select, on a random basis, consignments for those controls as part of its risk management.

4.    Each Party shall base risk management on assessment of risk through appropriate selectivity criteria.

ARTICLE 11.12

Post-clearance audit

1.    With a view to expediting the release of goods, each Party shall adopt or maintain post-clearance audit to ensure compliance with its customs and other trade-related laws and regulations.

2.    Each Party shall conduct post-clearance audits in a risk-based manner.

3.    Each Party shall conduct post-clearance audits in a transparent manner. If an audit is conducted and conclusive results have been achieved, the Party shall, without delay, notify the person, whose record is audited, of the results, the reasons for the results and the rights and obligations of that person.

4.    The Parties acknowledge that the information obtained in a post-clearance audit may be used in further administrative or judicial proceedings.

5.    Each Party shall, wherever practicable, use the result of post-clearance audit in applying risk management.

ARTICLE 11.13

Transparency

1.    The Parties recognise the importance of timely consultations with trade representatives on legislative proposals and general procedures related to customs and trade matters. To that end, each Party shall provide for appropriate consultations between administrations and the business community.

2.    Each Party shall ensure that their respective customs and related requirements and procedures

continue to meet the needs of the business community, follow best practices, and remain less

trade restrictive as possible.

3.    Each Party shall provide for appropriate regular consultations between border agencies and

traders or other stakeholders within its territory.

4.    Each Party shall publish promptly in a non-discriminatory and accessible manner, including

online, and prior to their application new laws and regulations related to customs and trade facilitation

matters, as well as amendments of, and interpretations of, those laws and regulations. Such laws and

regulations, as well as their amendments and interpretations, shall include those relating to:

(a)    importation, exportation and transit procedures, including port, airport, and other entry-point procedures, and required forms and documents;

(b)    applied rates of duties and taxes of any kind imposed on, or in connection with, importation or exportation;

(c)    fees and charges imposed by or for governmental agencies on or in connection with importation, exportation or transit;

(d)    rules for the classification or valuation of products for customs purposes;

(e)    laws, regulations and administrative rulings of general application relating to rules of origin;

(f)    import, export or transit restrictions or prohibitions;

(g)    penalty provisions against breaches of import, export or transit formalities;

(h)    agreements or parts thereof with any country or countries relating to importation, exportation or transit;

(i)    procedures related to the administration of tariff quotas;

(j)    operating hours and procedures for customs offices at ports and border crossing points;

(k)    contact points for information enquiries; and

(l)    other relevant notices of an administrative nature in relation to the above.

5.    Each Party shall ensure that there is a reasonable period of time between the publication 10 of new or amended laws, regulations and procedures and fees or charges and their entry into force.

6.    Each Party shall establish or maintain one or more enquiry points to respond reasonable enquiries from governments, operators and other interested parties on customs and other trade‑related matters. The enquiry points shall respond to enquiries within a reasonable period of time set by each Party, which may vary depending on the nature or complexity of the request. A Party shall not require the payment of a fee for responding to enquiries or providing required forms and documents.

ARTICLE 11.14

Advance rulings

1.    For the purposes of this Article, an "advance ruling" means a written decision provided to an applicant prior to the importation of a good covered by the application that sets out the treatment that the Party shall provide to the good at the time of importation with regard to:

(a)    the tariff classification of the good;

(b)    the origin of the good; and

(c)    any other matters as the Parties may agree.

2.    Each Party shall issue an advance ruling through its customs authorities. That advance ruling shall be issued in a reasonable and time limited manner to the applicant that has submitted a written request, including in electronic format, containing all necessary information in accordance with the laws and regulations of the issuing Party.

3.    The advance ruling shall be valid for a period of at least three-years from the date in which it takes effect, unless the law, facts or circumstances supporting the original advance ruling have changed.

4.    A Party may decline to issue an advance ruling if the facts and circumstances which form the basis of the advance ruling are under administrative or judicial review or if the application does not relate to any intended use of the advance ruling. If a Party declines to issue an advance ruling, it shall promptly notify the applicant in writing, setting out the relevant facts and the basis for its decision.

5.    Each Party shall publish, at least:

(a)    the requirements for the application for an advance ruling, including the information to be provided and the format;

(b)    the time period by which it will issue an advance ruling; and

(c)    the length of time for which the advance ruling is valid.

6.    If a Party revokes or modifies or invalidates an advance ruling, it shall provide written notice to the applicant setting out the relevant facts and the basis for its decision. A Party may only revoke, modify or invalidate an advance ruling with retroactive effect, if the ruling was based on incomplete, incorrect, false or misleading information provided by the applicant.

7.    An advance ruling issued by a Party shall be binding on that Party with respect to the applicant that sought it. The advance ruling shall also be binding on the applicant.

8.    Each Party shall provide, upon written request of an applicant, a review of the advance ruling or of the decision to revoke, modify or invalidate that advance ruling.

9.    Subject to confidentiality requirements in its laws and regulations, each Party shall make publicly available, including online, the substantive elements of its advance rulings.

ARTICLE 11.15

Transit and transhipment

1.    Each Party shall ensure the facilitation and effective control of transit movements and transhipment operations through its territory.

2.    Each Party shall promote and implement regional transit arrangements with a view to facilitating trade.

3.    Each Party shall ensure cooperation and coordination of its concerned authorities and relevant agencies to facilitate traffic in transit.

4.    Each Party shall allow goods intended for import to be moved within its territory under customs control from a customs office of entry to another customs office in its territory from where the goods are to be released or cleared, provided all regulatory requirements are met.

ARTICLE 11.16

Customs brokers

1.    A Party shall not introduce the mandatory use of customs brokers as a requirement for operators to fulfil their obligations with respect to the importation, exportation and transit of goods.

2.    Each Party shall publish its measures on the use of customs brokers.

3.    The Parties shall apply transparent, non-discriminatory and proportionate rules if and when licensing customs brokers.

ARTICLE 11.17

Pre-shipment inspections

The Parties shall not require the mandatory use of pre-shipment inspections, as defined in the Agreement on Pre-shipment Inspection, contained in Annex 1A to the WTO Agreement, or any other inspection activity performed at destination, before customs clearance, by private companies.

ARTICLE 11.18

Appeals

1.    Each Party shall provide effective, prompt, non-discriminatory and easily accessible procedures to guarantee the right of appeal against the administrative actions, rulings and decisions of customs authorities or other competent authorities affecting import or export of goods or goods in transit.

2.    Appeal procedures may include administrative review by the supervising authority and judicial review of decisions taken at the administrative level in accordance with the laws and regulations of a Party.

3.    Any person who has applied to the customs authorities or other competent authorities or a decision and has not obtained a decision on that application within the relevant time frames limit shall also be entitled to exercise the right of appeal.

4.    Each Party shall ensure that its customs authorities or other competent authorities provide to persons to whom administrative decisions are issued, the reasons for those decisions to facilitate, where necessary, recourse to appeal procedures.

ARTICLE 11.19

Penalties

1.    Each Party shall ensure that its customs laws and regulations provide that any penalties imposed for breaches of customs laws, regulations or procedural requirements are proportionate and non-discriminatory.

2.    Each Party shall ensure that any penalty imposed for a breach of its customs laws, regulations, or procedural requirements is imposed only on the person legally responsible for the breach.

3.    Each Party shall ensure that the penalty imposed depends on the facts and circumstances of the case and is commensurate with the degree and severity of the breach. Each Party shall avoid incentives for, or conflicts of interest in, the assessment and collection of penalties.

4.    Each Party is encouraged to consider prior disclosure to a customs authority of the circumstances of a breach of customs laws, regulations, or procedural requirements as a potential mitigating factor when establishing a penalty.

5.    If a Party imposes a penalty for a breach of its customs laws, regulations, or procedural requirements, it shall provide an explanation in writing to the person upon whom it imposes the penalty, specifying the nature of the breach and the applicable laws, regulations, or procedures pursuant to which the amount or range of penalty for the breach has been imposed.

ARTICLE 11.20

Sub-Committee on Customs, Trade Facilitation and Rules of Origin

1.    The Sub-Committee on Customs, Trade Facilitation and Rules of Origin ("Sub-Committee") is established pursuant to Article 8.8(1).

2.    The Sub-Committee shall ensure the proper implementation of this Chapter, the border enforcement of intellectual property rights by competent authorities in accordance with Sub‑Section 2 of Section C of Chapter 32, the Protocol to this Agreement on Mutual Administrative Assistance in Customs Matters and any additional customs-related provisions agreed between the Parties and examine all matters arising from their application.

3.    The functions of the Sub-Committee shall include:

(a)    monitoring the implementation and administration of this Chapter and of Chapter 10;

(b)    providing a forum to consult and discuss all matters concerning customs, including, in particular, customs procedures, customs valuation, tariff regimes, customs nomenclature, customs cooperation and mutual administrative assistance in customs matters;

(c)    providing a forum to consult and discuss issues relating to rules of origin and administrative cooperation, and border measures for intellectual property rights; and

(d)    enhancing cooperation on the development, application and enforcement of customs procedures, mutual administrative assistance in customs matters, rules of origin and administrative cooperation.

4.    The Sub-Committee may make recommendations on the matters covered by paragraph 2. The Joint Council or the Joint Committee shall have the power to adopt decisions on mutual recognition of risk management techniques, risk standards, security controls and trade facilitation partnership programmes, including aspects such as data transmission and mutually agreed benefits.

ARTICLE 11.21

Temporary admission

1.    For the purposes of this Article, "temporary admission" means the customs procedure under which certain goods, including means of transport, can be brought into a customs territory conditionally relieved from payment of import duties and taxes and without application of import prohibitions or restrictions of economic character. Those goods must be imported for a specific purpose and must be intended for re-exportation within a specified period of time and without having undergone any change except normal depreciation due to the use made of them.

2.    Each Party shall grant temporary admission, with total conditional relief from import duties and taxes and without application of import restrictions or prohibitions of economic character 11 , as provided for in its laws and regulations, to the following goods:

(a)    goods for display or use at exhibitions, fairs, meetings or similar events, which means goods intended for display or demonstration at an event, goods intended for use in connection with the display of foreign products at an event, and equipment including interpretation equipment, sound and image recording apparatus and films of an educational, scientific or cultural character intended for use at international meetings, conferences or congresses; and goods obtained at such events from goods placed under temporarily admission; each Party may require a governmental authorisation or a guarantee or deposit to be issued before the event takes place;

(b)    professional equipment, which means equipment for the press or for sound or television broadcasting which is necessary for representatives of the press or of broadcasting or television organisations visiting the territory of another country for purposes of reporting or in order to transmit or record material for specified programmes, cinematographic equipment necessary for a person visiting the territory of another country in order to make a specified film or films, any other equipment necessary for the exercise of the calling, trade or profession of a person visiting the territory of another country to perform a specified task, insofar as it is not to be used for the industrial manufacture or packaging of goods or, except in the case of hand tools, for the exploitation of natural resources, for the construction, repair or maintenance of buildings or for earth moving and like projects, ancillary apparatus for the equipment mentioned above, and accessories therefor; and component parts imported for repair of professional equipment temporarily admitted;

(c)    goods imported in connection with a commercial operation but whose importation does not in itself constitute a commercial operation, such as: packings which are imported filled for re-exportation empty or filled, or are imported empty for re-exportation filled; containers, whether or not filled with goods, and accessories and equipment for temporarily admitted containers, which are either imported with a container to be re-exported separately or with another container, or are imported separately to be re-exported with a container and component parts intended for the repair of containers granted temporary admission; pallets; samples; advertising films;

(d)    goods imported exclusively for educational, scientific or cultural purposes, such as scientific equipment, pedagogic material, welfare material for seafarers, and any other goods imported in connection with educational, scientific or cultural activities; spare parts for scientific equipment and pedagogic material which has been granted temporary admission; and tools specially designed for the maintenance, checking, gauging or repair of such equipment;

(e)    personal effects, which means all articles, new or used, which a traveller may reasonably require for his or her personal use during the journey, taking into account all the circumstances of the journey, but excluding any goods imported for commercial purposes; and goods imported for sports purposes, such as sports requisites and other articles for use by travellers in sports contests or demonstrations or for training in the territory of temporary admission;

(f)    tourist publicity material, which means goods imported for the purpose of encouraging the public to visit another foreign country, in particular in order to attend cultural, religious, touristic, sporting or professional meetings or demonstrations held there, each Party may require a guarantee or deposit to be provided for these goods;

(g)    goods imported for humanitarian purposes, which means medical, surgical and laboratory equipment and relief consignments, such as vehicles and other means of transport, blankets, tents, prefabricated houses or other goods of prime necessity, forwarded as aid to those affected by natural disaster and similar catastrophes; and

(h)    animals imported for specific purposes, such as: police dogs or horses, detector dogs, dogs for the blind, rescue dogs, participation in shows, exhibitions, contests, competitions or demonstrations, entertainment, such as circus animals, touring, including pet animals of travellers, performance of work or transport, medical purposes, such as delivery of snake poison.

3.    Each Party shall accept, in accordance with its laws and regulations 12 , the temporary admission of the goods referred to in paragraph 2 as well as, regardless of their origin, A.T.A. carnets issued in accordance with the Convention on temporary admission, done at Istanbul on 26 June 1990, in the other Party, endorsed in the other Party and guaranteed by an association forming part of the international guarantee chain, certified by the competent authorities and valid in the customs territory of the importing Party.

ARTICLE 11.22

Repaired goods

1.    For the purposes of this Article, "repair" means any processing operation undertaken in respect of a good to remedy an operating defect or material damage and entailing the re‑establishment of the good to its original function or to ensure compliance with technical requirements for its use, without which the good could no longer be used in the normal way for the purposes for which it was intended. The repair includes restoration and maintenance but does not include an operation or process that:

(a)    destroys the essential characteristics of a good, or creates a new or commercially different good;

(b)    transforms an unfinished good into a finished good; or

(c)    is used to improve or upgrade the technical performance of a good.

2.    A Party shall not apply a customs duty to a good, regardless of its origin, that re-enters its customs territory, after that good has been temporarily exported from its customs territory to the customs territory of the other Party for repair.

3.    Paragraph 2 does not apply to a good, imported in bond, into free trade zones, or in similar status, which is thereafter exported for repair and is not re-imported in bond, into free trade zones, or in similar status.

4.    A Party shall not apply a customs duty to a good, regardless of its origin, imported temporarily from the customs territory of the other Party for repair.

ARTICLE 11.23

Fees and formalities

1.    Fees and other charges that a Party imposes on or in connection with the importation or exportation of a good of the other Party shall be limited in amount to the approximate cost of services rendered, and shall not represent an indirect protection in respect of domestic goods or taxation of imports or exports for fiscal purposes.

2.    A Party shall not levy fees or other charges on or in connection with the importation or exportation of a good of the other Party on an ad valorem basis.

3.    Each Party may impose charges or recover costs only if specific services are rendered, including the following:

(a)    attendance, where requested, by customs staff outside official office hours or at premises other than customs premises;

(b)    analyses or expert reports on goods and postal fees for the return of goods to an applicant, particularly in respect of decisions relating to binding information or the provision of information concerning the application of the customs legislation;

(c)    examination or sampling of goods for verification purposes, or the destruction of goods, where costs other than the cost of using customs staff are involved; or

(d)    exceptional control measures, where these are necessary due to the nature of the goods or to a potential risk.

4.    Each Party shall promptly publish all fees and charges it may impose in connection with importation or exportation in such a manner as to enable governments, traders and other interested parties, to become acquainted with them.

5.    A Party shall not require consular transactions, including related fees and charges, in connection with the importation of any good of the other Party.

CHAPTER 12

TRADE REMEDIES

SECTION A

ANTI-DUMPING AND COUNTERVAILING DUTIES

ARTICLE 12.1

General provisions

1.    The Parties affirm their rights and obligations under the Anti-dumping Agreement and the SCM Agreement.

2.    For the purposes of this Section, the preferential rules of origin under Chapter 10 do not apply.

ARTICLE 12.2

Transparency

1.    Anti-dumping and anti-subsidy investigations and measures should be used in full compliance with the relevant WTO requirements set out in the Anti-dumping Agreement and the SCM Agreement and should be based on a fair and transparent system.

2.    Each Party shall ensure, as soon as practicable after any imposition of provisional measures and in any case before final determination is made, full disclosure of all essential facts and considerations on which it bases a decision to apply definitive measures. Such disclosure is without prejudice to Article 6.5 of the Anti-Dumping Agreement and Article 12.4 of the SCM Agreement. Each Party shall disclose such essential facts and considerations in writing, and allow interested parties sufficient time to submit comments thereon.

3.    Each interested party shall be granted the possibility to be heard in order to express its views during an anti-dumping or anti-subsidy investigation, provided that this does not unnecessarily delay the conduct of the investigation.

ARTICLE 12.3

Consideration of public interest

Each Party shall take into account the situation of its domestic industry, importers and their representative associations, representative users and representative consumer organisations to the extent that they have provided relevant information to the investigating authorities within the relevant timeframe. A Party may decide not to apply anti-dumping or countervailing measures on the basis of such information.

ARTICLE 12.4

Lesser duty rule

If a Party imposes an anti-dumping duty on the goods of the other Party, the amount of such duty shall not exceed the margin of dumping. Whenever possible, the anti-dumping duty should be less than that margin if such lesser duty would be adequate to remove the injury to the domestic industry.

ARTICLE 12.5

Non-application of dispute settlement

Chapter 38 does not apply to this Section.

SECTION B

GLOBAL SAFEGUARD MEASURES

ARTICLE 12.6

General provisions

1.    The Parties affirm their rights and obligations pursuant to Article XIX of GATT 1994, the Safeguards Agreement and Article 5 of the Agreement on Agriculture.

ARTICLE 12.7

Transparency and imposition of definitive measures

1.    Notwithstanding Article 12.6, the Party initiating a global safeguard investigation or intending to apply global safeguard measures shall, on request of the other Party and provided that the latter has a substantial interest, immediately provide a written notification containing all pertinent information leading to the initiation of a global safeguard investigation or the application of global safeguard measures, including on the provisional findings, if relevant. Such notification is without prejudice to Article 3.2 of the Safeguards Agreement.

2.    When imposing definitive global safeguard measures, each Party shall endeavour to impose them in a way that least affects bilateral trade, provided that the Party affected by the measures has a substantial interest as defined in paragraph 4.

3.    For the purposes of paragraph 2, if a Party considers that the legal requirements for the imposition of definitive global safeguard measures are met, and intends to apply such measures, it shall notify the other Party and grant the possibility of holding bilateral consultations, provided that the other Party has a substantial interest as defined in paragraph 4. If no satisfactory solution has been reached within 15 days of the notification, the importing Party may adopt the appropriate global safeguard measures to remedy the problem.

4.    For the purposes of this Article, a Party shall be considered to have a substantial interest when it is among the five largest suppliers of the imported good during the most recent three-year time period, measured in terms of either absolute volume or value.

ARTICLE 12.8

Non-application of dispute settlement

Chapter 38 does not apply to this Section.

SECTION C

BILATERAL SAFEGUARD MEASURES

SUB-SECTION 1

GENERAL PROVISIONS

ARTICLE 12.9

Definitions

For the purposes of this Section:

(a)    "domestic industry" means, with respect to an imported good, the producers as a whole of like or directly competitive goods operating within the territory of a Party, or the producers whose collective output of like or directly competitive goods constitutes a major proportion of the total domestic production of those goods.

(b)    "transition period" means:

(i)    a period of seven years from the date of entry into force of this Agreement; or

(ii)    for any good for which the schedule in Annex 9 of the Party applying a bilateral safeguard measure provides for a tariff elimination period of seven years, the tariff elimination period for that good plus two years.

ARTICLE 12.10

Application of a bilateral safeguard measure

1.    Notwithstanding Section B, if, as a result of the reduction or elimination of a customs duty under this Part of this Agreement, a good originating in a Party is being imported into the territory of the other Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to domestic producers of like or directly competitive goods, the importing Party may take appropriate bilateral safeguard measures under the conditions and in accordance with the procedures laid down in this Section.

2.    If the conditions in paragraph 1 are met, the importing Party may apply one of the following bilateral safeguard measures:

(a)    the suspension of any further reduction of the rate of customs duty on the good concerned as provided for under this Part of this Agreement; or

(b)    the increase in the rate of customs duty on the good concerned to a level which does not exceed the lesser of:

(i)    the most-favoured-nation applied rate of customs duty on the good in effect at the time of application of the measure; or

(ii)    the most-favoured-nation applied rate of customs duty on the good in effect on the day immediately preceding the date of entry into force of this Agreement.

ARTICLE 12.11

Standards for bilateral safeguard measures

1.    A bilateral safeguard measure shall not be applied:

(a)    except to the extent, and for such time, as may be necessary to prevent or remedy serious injury or threat thereof to the domestic industry;

(b)    for a period exceeding two years; the period may be extended by another two years, if the competent investigating authority of the importing Party determines, in conformity with the procedures specified in this Section, that the measure continues to be necessary to prevent or remedy serious injury or threat thereof to the domestic industry, provided that the total period of application of the bilateral safeguard measure, including the period of initial application and any extension thereof, does not exceed four years; or

(c)    beyond the expiration of the transition period as defined in subparagraph (b) of Article 12.9.

2.    When a Party ceases to apply a bilateral safeguard measure, the rate of customs duty shall be the rate that would have been in effect for the good in accordance with its schedule in Annex 9.

3.    In order to facilitate adjustment of the industry concerned in a situation where the expected duration of a bilateral safeguard measure exceeds one year, the Party applying the measure shall progressively liberalise it at regular intervals during the period of application.

ARTICLE 12.12

Provisional bilateral safeguard measures

1.    In critical circumstances where delay would cause damage that would be difficult to repair, a Party may apply a bilateral safeguard measure on a provisional basis, without complying with the requirements of Article 12.21 (1) pursuant to a preliminary determination that there is clear evidence that imports of a good originating in the other Party have increased as the result of the reduction or elimination of a customs duty under this Part , and that such imports cause or threaten to cause serious injury to the domestic industry.

2.    The duration of any provisional bilateral safeguard measure shall not exceed 200 days, during which time the Party applying the measure shall comply with the relevant procedural rules laid down in Sub-Section 2. The Party applying the provisional bilateral safeguard measure shall promptly refund any tariff increases if the investigation described in Sub-Section 2 does not result in a finding that the conditions of Article 12.10 (1) are met. The duration of the provisional bilateral safeguard measure shall be counted as part of the period described in subparagraph (b) of Article 12.11(1).

3.    The Party applying a provisional bilateral safeguard measure shall inform the other Party upon taking such provisional measures and shall immediately refer the matter to the Joint Committee for examination if the other Party so requests.

ARTICLE 12.13

Compensation and suspension of concessions

1.    A Party applying a bilateral safeguard measure shall consult with the other Party whose products are subject to the measure in order to agree on appropriate trade liberalising compensation in the form of concessions having substantially equivalent trade effects. The Party applying a bilateral safeguard measure shall provide an opportunity for such consultations no later than 30 days after the application of the bilateral safeguard measure.

2.    If the consultations referred to in paragraph 1 do not result in an agreement on trade liberalising compensation within 30 days after the start of the consultations, the Party whose goods are subject to the bilateral safeguard measure may suspend the application of concessions having substantially equivalent effects on the trade of the other Party.

3.    The Party whose goods are subject to the bilateral safeguard measure shall notify the other Party in writing at least 30 days before it suspends the application of concessions in accordance with paragraph 2.

4.    The obligation to provide compensation pursuant to paragraph 1 and the right to suspend the application of concessions pursuant to paragraph 2 shall:

(a)    not be exercised for the first 24 months during which a bilateral safeguard measure is in effect, provided that the bilateral safeguard measure has been applied as a result of an absolute increase in imports; and

(b)    cease on the date of termination of the bilateral safeguard measure.

ARTICLE 12.14

Time lapse between two safeguard measures and non-parallel application of safeguard measures

1.    A Party shall not apply a safeguard measure as referred to in this Section to the import of a good that has previously been subject to such a measure, unless a period of time equal to half of the time during which the safeguard measure was applied for the immediately preceding period has elapsed. A safeguard measure that has been applied more than once on the same good may not be extended by another two years as set out in subparagraph (b) of Article 12.11(1).

2.    A Party shall not apply, with respect to the same good and during the same period:

(a)    a bilateral safeguard measure or a provisional bilateral safeguard measure under this Part; and

(b)    a global safeguard measure pursuant to Article XIX of GATT 1994 and the Safeguards Agreement.

ARTICLE 12.15

Outermost regions 13 of the European Union

1.    If any good originating in Chile is being imported into the territory of one or more of the outermost regions of the European Union in such increased quantities and under such conditions as to cause or threaten to cause serious deterioration in the economic situation of the outermost region concerned, the EU Party, after having examined alternative solutions, may exceptionally apply bilateral safeguard measures limited to the territory of the region concerned.

2.    For the purposes of paragraph 1, "serious deterioration" means major difficulties in a sector of the economy producing like or directly competitive goods. The determination of serious deterioration shall be based on objective factors, including the following:

(a)    the increase in the volume of imports, in absolute terms or relative to domestic production and to imports from other sources; and

(b)    the effect of the imports referred to in paragraph 1 on the situation of the industry or economic sector concerned, including on the levels of sales, production, financial situation and employment.

3.    Without prejudice to paragraph 1, other provisions of this Section applicable to bilateral safeguard measures are also applicable to any safeguard measures adopted under this Article. Any reference to "serious injury" in other provisions of this Section shall be understood as "serious deterioration" when applied in relation to outermost regions of the European Union.

SUB-SECTION 2

PROCEDURAL RULES APPLICABLE TO BILATERAL SAFEGUARD MEASURES

ARTICLE 12.16

Applicable law

For the application of bilateral safeguard measures, the competent investigating authority of each Party shall comply with the provisions of this Sub-Section. In cases not covered by this Sub‑Section, the competent investigating authority shall apply the rules established under the law of the Party of that authority.

ARTICLE 12.17

Initiation of a safeguard procedure

1.    A competent investigating authority of a Party may initiate a procedure regarding bilateral safeguard measures ("safeguard procedure") upon a written application 14 by or on behalf of the domestic industry, or in exceptional circumstances on its own initiative.

2.    The application shall be considered to have been made by or on behalf of the domestic industry if it is supported by domestic producers whose collective output constitutes more than 50 % of the total domestic production of the like or directly competitive goods produced by the portion of the domestic industry expressing either support for or opposition to the application. However, a competent investigating authority shall not initiate an investigation if the domestic producers expressing support for the application account for less than 25 % of the total domestic production of the like or directly competitive goods produced by the domestic industry.

3.    Once a competent investigating authority has initiated the investigation, the written application referred to in paragraph 1 shall be made available to interested parties, except for any confidential information contained therein.

4.    Upon initiation of a safeguard procedure, the competent investigating authority shall publish a notice of initiation of the safeguard procedure in the official journal of the Party. The notice shall identify:

(a)    the entity which filed the written application, if applicable;

(b)    the imported good subject to the safeguard procedure;

(c)    the subheading and tariff item number under which the imported good is classified;

(d)    the type of proposed measure to be applied;

(e)    the public hearing pursuant to subparagraph (a) of Article 12.20 or the period within which interested parties may submit a request to be heard pursuant to subparagraph (b) of Article 12.20;

(f)    the place where the written application and any other non-confidential documents filed in the course of the proceeding may be inspected; and

(g)    the name, address and telephone number of the office to be contacted for more information.

5.    With respect to a safeguard procedure initiated pursuant to paragraph 1 on the basis of a written application, the competent investigating authority concerned shall not publish the notice required by paragraph 3 without first assessing carefully whether the written application meets the requirements of its domestic legislation and the requirements of paragraph 1 and 2 and includes reasonable evidence that imports of a good originating in the other Party have increased as the result of the reduction or elimination of a customs duty under this Part , and that such imports cause or threaten to cause the alleged serious injury.

ARTICLE 12.18

Investigation

1.    A Party shall apply a bilateral safeguard measure only after an investigation has been carried out by its competent investigating authority in accordance with Article 3 (1) and subparagraph (c) of Article 4.2 of the Safeguards Agreement; to this end, Article 3 (1) and subparagraph (c) of Article 4.2 of the Safeguards Agreement are incorporated into and made part of this Agreement, mutatis mutandis.

2.    In the investigation referred to in paragraph 1, the Party shall comply with the requirements of subparagraph (a) of Article 4.2 of the Safeguards Agreement. To this end, subparagraph (a) of Article 4.2 of the Safeguards Agreement is incorporated into and made part of this Agreement, mutatis mutandis.

3.    If a Party makes a notification pursuant to paragraph 1 of this Article and Article 3(1) of the Safeguards Agreement that it is applying or extending a bilateral safeguard measure, that notification shall include:

(a)    evidence of serious injury, or threat of serious injury, caused by increased imports of a good originating in the other Party, as a result of the reduction or elimination of a customs duties under this Part ; the investigation shall demonstrate, on the basis of objective evidence, the existence of a causal link between the increased imports of the good concerned and the serious injury or threat thereof. Known factors other than the increased imports shall also be examined to ensure that the serious injury or the threat of serious injury caused by these other factors is not attributed to the increased imports.

(b)    a precise description of the originating good subject to the bilateral safeguard measure, including its heading or subheading under the HS Code, on which the schedules of tariff commitments in Annex 9 are based;

(c)    a precise description of the bilateral safeguard measure;

(d)    the date of the introduction of the bilateral safeguard measure, its expected duration and, if applicable, a timetable for progressive liberalisation of the measure in accordance with Article 12.11(3); and

(e)    in case of an extension of the bilateral safeguard measure, evidence that the domestic industry concerned is adjusting.

4.    On request of a Party whose good is subject to a safeguard procedure under this Section, the Party conducting that procedure shall enter into consultations with the requesting Party to review a notification under paragraph 1 or any public notice or report that the competent investigating authority has issued in relation to the safeguard procedure.

5.    Each Party shall ensure that its competent investigating authority completes any investigation pursuant to this Article within 12 months after the date of its initiation.

ARTICLE 12.19

Confidential information

1.    Any information which is by nature confidential or which is provided on a confidential basis shall, upon good cause being shown, be treated as confidential by the competent investigating authority. Such information shall not be disclosed without permission of the interested party submitting it.

2.    Interested parties providing confidential information are requested to furnish non-confidential summaries thereof or, if such parties indicate that the information cannot be summarised, the reasons therefor. The summaries shall be sufficiently detailed to permit a reasonable understanding of the substance of the information submitted in confidence. However, if the competent investigating authority finds that a request for confidentiality is not warranted and if the interested party concerned is either unwilling to make the information public or to authorise its disclosure in generalised or summary form, the competent investigating authority may disregard such information, unless it can be demonstrated to the satisfaction of that authority, in view of information from appropriate sources, that the information is correct.

ARTICLE 12.20

Hearings

In the course of each safeguard procedure, the competent investigating authority shall:

(a)    hold a public hearing, after providing reasonable notice, to allow all interested parties and any representative consumer association to appear in person or by counsel in order to present evidence and to be heard regarding serious injury or threat of serious injury, and the appropriate remedy; or

(b)    provide an opportunity to all interested parties to be heard if they have submitted a written request, within the period laid down in the notice of initiation referred to in Article 12.17(4), showing that they are likely to be affected by the outcome of the investigation and that there are special reasons for them to be heard orally.

ARTICLE 12.21

Notifications, examination in the Joint Committee and publications

1.    If a Party considers that one of the circumstances set out in Article 12.10(1) or 12.15(1) exists, it shall immediately refer the matter to the Joint Committee for examination. The Joint Committee may make any recommendation needed to remedy the circumstances which have arisen. If no recommendation has been made by the Joint Committee aimed at remedying the circumstances, or no other satisfactory solution has been reached within 30 days after the date on which the Party refers the matter to the Joint Committee, the importing Party may adopt the appropriate bilateral safeguard measures to remedy the circumstance in accordance with this Section.

2.    For the purposes of paragraph 1, the importing Party shall provide the exporting Party with all relevant information, including evidence of serious injury or threat thereof to domestic producers of the like and directly competitive good, caused by increased imports, a precise description of the good involved, and the proposed bilateral safeguard measure, its proposed date of imposition and expected duration.

3.    The Party that adopts the bilateral safeguard measure shall publish its findings and reasoned conclusions reached on all pertinent issues of fact and law in the official journal of that Party, including the description of the imported good and the situation which has given rise to the imposition of measures in accordance with Articles 12.10 (1) or 12.15 (1), the causal link between such situation and the increased imports, and the form, level and duration of the measures.

ARTICLE 12.22

Acceptance of English documents in safeguard procedures

In order to facilitate the submission of documents in safeguard procedures, the competent investigating authority of the Party in charge of the procedure shall accept documents submitted in English by interested parties, provided that those parties submit later, within a longer deadline set by the competent authority, a translation of the documents into the language of the safeguard procedure.

CHAPTER 13

SANITARY AND PHYTOSANITARY MEASURES

ARTICLE 13.1

Objectives

The objectives of this Chapter are: