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MERCOSUR AGREEMENT PREFERENTIAL TRADE AGREEMENT BETWEEN THE SOUTHERN COMMON MARKET (MERCOSUR) AND THE SOUTHERN AFRICAN CUSTOMS UNION (SACU) The Argentine Republic, the Federative Republic of Brazil, the Republic of Paraguay and the Republic Oriental del Uruguay, States Parties to the MERCOSUR, and the Republic of Botswana, the Kingdom of Lesotho, the Republic of Namibia, the Republic of South Africa and the Kingdom of Swaziland, Member States of SACU.
WHEREAS the SACU Agreement of 2002 establishes a Common Negotiating Mechanism for Botswana, Lesotho, Namibia, South Africa and Swaziland in regard to trade relations with third Parties; WHEREAS implementation of an instrument providing for the granting of fixed preferences during said stage will facilitate subsequent negotiations for the creation of a Free Trade Area; WHEREAS the negotiations needed to implement the granting of preferences and to establish trade disciplines between the Parties have been conducted; WHEREAS these negotiations have taken into account the principle of special and differential treatment for the smaller and the lesser developed economies in MERCOSUR and SACU; WHEREAS regional integration and South-South trade, including through the creation of free trade areas, are compatible with the multilateral trading system, and contributes to the expansion of world trade, to the integration of their economies into the global economy, and to the social and economic development of their peoples; WHEREAS the process of integrating their economies includes the gradual and reciprocal liberalization of trade and the strengthening of economic co-operation ties among themselves; WHEREAS the Parties reiterate their will to promote the South Atlantic as a zone of peace and cooperation; WHEREAS Article 27 of the Treaty of Montevideo 1980, of which the MERCOSUR Member States Parties are Signatory Parties, authorizes the conclusion of Partial Scope Agreements with other developing countries and economic integration areas outside Latin America. HEREBY AGREE AS FOLLOWS: Chapter I Article 1 For the purposes of this Agreement, the 'Contracting Parties' (hereinafter referred to as 'Parties') are MERCOSUR and SACU. The 'Signatory Parties' are the Governments of the Argentine Republic, the Federative Republic of Brazil, the Republic of Paraguay, the Republic Oriental del Uruguay, the Republic of Botswana, the Kingdom of Lesotho, the Republic of Namibia, the Republic of South Africa and the Kingdom of Swaziland. Article 2 The Parties hereby agree to establish fixed preference margins as a first step towards the creation of a free trade area between MERCOSUR and SACU. Chapter II Article 3 Annexes I and II to this Agreement contain the tariff preferences and other conditions agreed for the importation of negotiated products from the respective territories of the Signatory Parties. a) Annex I sets forth the preferences granted by MERCOSUR to SACU; b) Annex II sets forth the preferences granted by SACU to MERCOSUR. Article 4 The products included in Annex I and II are classified in accordance with the Harmonised System (HS) 2002. Article 5 Tariff preferences shall be applied to all customs duties in force in each Signatory Party at the time of importing the relevant product. Article 6 A customs duty includes duties and charges of any kind imposed in connection with the importation of a good, but does not include: a) internal taxes or other internal charges imposed consistently with Article III of the General Agreement on Tariffs and Trade 1994 (GATT 1994); b) antidumping or countervailing duties in accordance with Article VI and XVI of GATT 1994, the World Trade Organisation (WTO) Agreement on Implementation of Article VI of the GATT 1994 and the WTO Agreement on Subsidies and Countervailing Measures; c) other duties or charges imposed in a manner that is not inconsistent with: i.- Article VIII of GATT 1994; or ii.- the Understanding on the Interpretation of Article II:1 (b) of the GATT 1994. d) duties imposed by the Governments of the Republic of Botswana, the Kingdom of Lesotho, the Republic of Namibia and the Kingdom of Swaziland for the development of infant industries pursuant to Article 26 of the SACU Agreement 2002. In such cases, the SACU Signatory Party intending to apply any such duties shall promptly notify the Joint Administration Committee and shall enter into consultations where these duties adversely affect the preferential exports of the Republic of Paraguay and/or the República Oriental del Uruguay, aiming at a mutually satisfactory solution to the matter, which shall be notified to the Joint Administration Committee. Article 7 Except otherwise provided for in this Agreement or in GATT 1994, the Signatory Parties shall not apply non-tariff restrictions to the exchange of products included in the Annexes to this Agreement. Non-tariff restrictions shall refer to any administrative, financial, exchange-related or other measure whereby a party prevents or hinders mutual trade by virtue of a unilateral decision. Article 8 For the purposes of this Agreement, used products shall be subjected to the domestic regulations of the Signatory Parties. Article 9 The Parties agree to negotiate a Protocol on mutual administrative assistance to be annexed to this Agreement before the implementation of this Agreement, taking into account that the Signatory Parties for MERCOSUR maintain separate customs jurisdictions. Chapter III Article 10 The products included in Annexes I and II of this Agreement shall meet the rules of origin specified in Annex III in order to qualify for tariff preferences. Chapter IV Article 11 In matters relating to taxes, fees or any other domestic duties, the products originating from the territory of any of the Signatory Parties shall receive in the territory of the other Signatory Parties the same treatment applied to the national product in accordance with Article III of GATT 1994 . Chapter V Article 12 On matters related to customs valuation, the Signatory Parties shall refer to Article VII of GATT 1994 and the WTO Agreement on the Implementation of Article VII of GATT 1994. Chapter VI Article 13 The implementation of safeguard measures concerning the imported products that are the object of the tariff preferences established in Annexes I and II shall be carried out according to the rules agreed upon in Annex IV of this Agreement. Chapter VII Article 14 In applying antidumping and countervailing measures, the Signatory Parties shall be governed by their respective legislation, which shall be consistent with Articles VI and XVI of the GATT 1994, the Agreement on Implementation of Article VI of GATT 1994 and the WTO Agreement on Subsidies and Countervailing Measures. Article 15 The Signatory Parties undertake to give notice, within thirty (30) days and through their competent bodies, of the initiation of investigations in connection with dumping practices or subsidies affecting mutual trade, as well as the preliminary and final conclusions thereof. Chapter VIII Article 16 1. The provisions of this Chapter are intended to prevent technical regulations and standards, conformity assessment procedures and metrology of the Signatory Parties from becoming unnecessary technical barriers to mutual trade. 2. This Chapter applies to all standards, technical regulations and conformity assessment procedures as defined in the WTO Agreement on Technical Barriers to Trade (TBT Agreement). 3. This Chapter does not apply to sanitary and phytosanitary measures as defined in Annex A of the WTO Agreement on Sanitary and Phytosanitary Measures (SPS Agreement). Article 17 For the purposes of this chapter, definitions as per Annex 1 of the WTO TBT Agreement and the decisions of the WTO TBT Committee established pursuant to Article 13 of the WTO TBT Agreement shall apply. Article 18 The Signatory Parties affirm their existing rights and obligations in respect of technical regulations, standards and conformity assessment procedures with respect to each other under the WTO TBT Agreement. Article 19 The Signatory Parties shall intensify their joint work in the field of standards, technical regulations, and conformity assessment procedures with a view to facilitating market access. In this process, the Signatory Parties shall seek to identify initiatives that are appropriate for particular issues or sectors. Article 20 1. The Signatory Parties shall strengthen their mutual cooperation in the field of technical regulations and standards, conformity assessment and metrology in order to enhance mutual understanding of their respective systems with the aim of facilitating access to their respective markets. 2. For such purpose, the Signatory Parties undertake the following cooperation: a) to promote the application of the WTO TBT Agreement; b) to strengthen their respective bodies dealing with standardisation, technical regulation, conformity assessment and metrology, as well as their information and notification systems; c) to strengthen the technical reliability of standardisation, technical regulation, conformity assessment and metrology bodies; d) to increase participation and seek coordination of common positions at international organisations on issues related to this Chapter; e) to support the development and application of international standards; f) to exchange information on the variety of mechanisms to facilitate the acceptance of conformity assessment results; g) to strengthen mutual technical confidence between the competent bodies, aiming at negotiations of mutual recognition on technical regulations and standards, conformity assessment and metrology in accordance with the criteria set by relevant international organisations or the WTO TBT Agreement. Chapter IX Article 21 This Chapter applies to all sanitary and phytosanitary measures of a Signatory Party that may, directly or indirectly, affect trade between the Parties. For the purposes of this Chapter, sanitary or phytosanitary measure means any measure referred to in Annex A, paragraph 1, of the WTO SPS Agreement. Article 22 The Signatory Parties reaffirm their rights and obligations set out in the WTO Agreement on the Application of Sanitary and Phytosanitary Measures. Article 23 The Signatory Parties agree to cooperate in the areas of animal health, plant protection and food safety, through their respective competent authorities in order to strengthen mutual technical confidence. Such cooperation may lead to, inter alia, negotiations of equivalence agreements on sanitary and phytosanitary measures in accordance with standards, guidelines and recommendations developed by the relevant international organisations, with due regard to the Signatory Parties' individual domestic legislation, the WTO SPS Agreement and their individual and collective SPS status. Chapter X Article 24 The Parties agree to create a Joint Administration Committee (hereinafter referred to as "the Committee") comprised of the Common Market Group, or its representatives on the side of MERCOSUR, and of the Common Negotiating Mechanism on the side of SACU. Article 25 The Committee shall hold its first meeting within sixty (60) days of the entry into force of this Agreement to establish its working procedures. Article 26 The Committee shall meet ordinarily at least once every year, at such venues as shall be agreed by the Parties, and extraordinarily at any time, at the request of a Party. Article 27 The Committee shall adopt its decisions by consensus and shall have the following functions, inter alia: a) to ensure the proper functioning and implementation of this Agreement, its Annexes and Additional Protocols and the dialogue between the Parties; b) to consider and submit to the Parties any modifications and amendments to this Agreement; c) to evaluate the process of trade liberalisation established under this Agreement, study the development of trade between the Parties and recommend further steps to create a free trade area in accordance with Article 2; d) to perform other functions that may arise from the provisions of this Agreement, its Annexes and any Additional Protocols; e) to establish mechanisms to encourage the active participation of the private sectors in trade between the Parties; f) to exchange opinions and make suggestions on any issue of mutual interest relating to trade, including future action; g) to address non-tariff measures that unnecessarily restrict trade between the Parties. Chapter XI Article 28 Any disputes arising in connection with the application of, interpretation of, or non-compliance with this Agreement shall be settled in accordance with the rules established in the Annex V of this Agreement. Chapter XII Article 29 Any Party may initiate a proposal to amend or modify the provisions of this Agreement by submitting such proposal to the Committee. The decision to amend shall be taken by mutual consent of the Parties. Article 30 The amendments or modifications to this Agreement shall be adopted by means of Additional Protocols thereto. Chapter XIII Article 31 If one of the Contracting Parties incorporates one or more new Member States, it shall notify the other Contracting Party and afford adequate opportunity for consultations on the terms referred to in Article 32. Article 32 The incorporation into this Agreement of
new members to MERCOSUR or to SACU, as Signatory Parties, shall be formalised
by means of an Additional Protocol. Article 33 This Agreement shall be subject to signature of all the Signatory Parties and shall enter into force thirty (30) days after all Signatory Parties have formally notified, through diplomatic channels, the completion of the respective internal procedures to that effect. For MERCOSUR the notification will be done by the MERCOSUR Pro Tempore Presidency and for SACU the notification will be done by the SACU Secretariat. Article 34 This Agreement shall remain in force until the date of entry into force of the Agreement for the creation of a Free Trade Area between MERCOSUR and SACU unless terminated by either Party giving to the other Party twelve (12) months written notice of its intention to terminate this Agreement. Chapter XV Article 35 Any Signatory Party which withdraws from the SACU Agreement or the MERCOSUR Agreement shall ipso facto on the same day as the withdrawal takes effect cease to be a Signatory Party to this Agreement. Should any SACU State wish to withdraw from this Agreement as a Signatory Party, it shall give formal notice of its intention to the other Signatory Parties at least sixty (60) days in advance. Article 36 Once withdrawn, the rights and obligations assumed by the withdrawing party shall cease to apply, but it shall be bound to comply with obligations in connection with the tariff preferences established in Annexes I and II of this Agreement for a term of one year, unless otherwise agreed upon. The Committee shall evaluate the impact of the withdrawal on the balance of rights and obligations of this Agreement and, as appropriate, recommend adjustments to the Parties. Chapter XVI Article 37 The Government of the Republic of Paraguay shall be the Depositary of this Agreement for MERCOSUR. The SACU Secretariat shall be the Depositary of this Agreement for SACU. Article 38 In fulfilment of their depositary functions, the Government of the Republic of Paraguay and the SACU Secretariat shall notify the States Parties of MERCOSUR and Member States of SACU respectively, of the date on which this Agreement shall enter into force. Done in the city of Belo Horizonte, Federative Republic of Brazil, on the 16th day of December 2004, in two copies in the Spanish, Portuguese and English languages, all texts being equally authentic. In case of doubt or divergence of interpretation, however, the English text shall prevail. ANNEX III CONCERNING THE DEFINITION OF THE CONCEPT OF "ORIGINATING PRODUCTS" AND METHODS OF ADMINISTRATIVE COOPERATION TABLE OF CONTENTS TITLE I GENERAL PROVISIONS - Article 1 Definitions TITLE II DEFINITION OF THE CONCEPT OF "ORIGINATING PRODUCTS" - Article 2 General requirements TITLE III TERRITORIAL REQUIREMENTS - Article 12 Principle of territoriality TITLE IV CERTIFICATE OF ORIGIN - Article 15 General requirements TITLE V ARRANGEMENTS FOR ADMINISTRATIVE CO-OPERATION - Article 26 Notifications TITLE VI FINAL PROVISIONS
TITLE I Article 1 For the purposes of this Annex: (a) "manufacture" means any kind
of working or processing including assembly or specific operations; TITLE II Article 2 1. For the purpose of implementing this Agreement, the following products shall be considered as originating in MERCOSUR or SACU: (a) products wholly obtained in a Party within the meaning of Article 4; (b) products obtained in a Party incorporating non-originating materials, provided that such materials have undergone sufficient working or processing in the Party within the meaning of Article 5. Article 3 1. Notwithstanding Article 2, materials and products originating in MERCOSUR within the meaning of this Annex shall be considered as originating in SACU, provided that they have undergone working or processing in SACU going beyond that referred to in Article 6. 2. Notwithstanding Article 2, materials and products originating in SACU within the meaning of this Annex shall be considered as originating in MERCOSUR, provided that they have undergone working or processing in MERCOSUR going beyond that referred to in Article 6. Article 4 1. The following shall be considered as
wholly obtained in MERCOSUR or in SACU: Article 5 1. For the purposes of Article 2, products covered by this Agreement which are not wholly obtained are considered to be sufficiently worked or processed when the conditions set out in the list in Appendix II are fulfilled . 2. Goods which are not covered by this Agreement
as listed in Annexes I and II, but which are incorporated into a good
that is covered by this Agreement, are considered to be sufficiently worked
or processed if : 3. Notwithstanding paragraphs 1 and 2, non-originating
materials which, according to the conditions set out in the list, should
not be used in the manufacture of a product may nevertheless be used,
provided that: 4. Paragraphs 1 to 3 shall apply subject to the provisions of Article 6. Article 6 1. Without prejudice to paragraph 2, the following operations shall be considered as insufficient working or processing to confer the status of originating products, whether or not the requirements of Article 5 are satisfied: (a) preserving operations to ensure that
the products remain in good condition during transport and storage; 2. All operations carried out either in MERCOSUR or in SACU on a given product shall be considered together when determining whether the working or processing undergone by that product is to be regarded as insufficient within the meaning of paragraph 1. Article 7 1. The unit of qualification for the application
of the provisions of this Annex shall be the particular product which
is considered as the basic unit when determining classification using
the nomenclature of the Harmonized System. 2. The packages and packing materials for retail sale, when classified together with the packaged product, in accordance with General Rule 5 b) of the Harmonized System shall not be taken into account for considering whether all non-originating materials used in the manufacture of a product fulfil the criterion corresponding to a change of tariff classification of the said product. 3. If the product is subject to an ad valorem percentage criterion, the value of the packages and packing material for retail sale shall be taken into account in its origin assessment. Article 8 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. Article 9 Sets, as defined in General Rule 3 of the Harmonized System, shall be regarded as originating when all component products are originating. Nevertheless, when a set is composed of originating and non-originating products, the set as a whole shall be regarded as originating, provided that the value of the non-originating products does not exceed 15 per cent of the price of the set (price of the product). Article 10 The containers and packing materials exclusively used for the transport of a product shall not be taken into account for determining the origin of any good or product, in accordance with General Rule 5 b) of the Harmonized System. Article 11 In order to determine whether a product
originates, it shall not be necessary to determine the origin of the following
which might be used in its manufacture : TITLE III Article 12 1. The conditions for acquiring originating status set out in Title II must be fulfilled without interruption in MERCOSUR or in SACU. 2. Where originating goods exported from MERCOSUR or from SACU to another country return, they must be considered as non-originating, unless it can be demonstrated to the satisfaction of the customs authorities that: (a) the returning goods are the same as those exported; and (b) they have not undergone any operation beyond that necessary to preserve them in good condition while in that country or while being exported. Article 13 1. The preferential treatment provided for under the Agreement applies only to products satisfying the requirements of this Annex, which are transported directly between MERCOSUR and SACU. However, products constituting one single consignment may be transported through other territories with, should the occasion arise, transhipment or temporary warehousing in such territories, provided that they remain under the surveillance of the customs authorities in the country of transit or warehousing and do not undergo operations other than unloading, reloading or any operation designed to preserve them in good condition. Originating products may be transported by pipeline across territory other than that of the Signatory Parties. 2. Evidence that the conditions set out in paragraph 1 have been fulfilled shall be supplied to the customs authorities of the importing country by the production of: (a) a single transport document covering
the passage from the exporting country through the country of transit;
or Article 14 1. Originating products, sent for exhibition
outside the Signatory Parties and sold after the exhibition for importation
into MERCOSUR or into SACU shall benefit on importation from the provisions
of the Agreement provided it is shown to the satisfaction of the customs
authorities that: 2. A certificate of origin must be issued or made out in accordance with the provisions of Title IV and submitted to the customs authorities of the importing country in the normal manner. The name and address of the exhibition must be indicated thereon. Where necessary, additional documentary evidence of the conditions under which they have been exhibited may be required. 3. Paragraph 1 shall apply to any trade, industrial, agricultural or crafts exhibition, fair or similar public show or display which is not organized 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. TITLE IV Article 15 1. Products originating in a Signatory Party shall, on importation into MERCOSUR or SACU, benefit from the Agreement upon submission of a certificate of origin, a specimen of which appears in Appendix III. 2. Notwithstanding paragraph 1, originating products within the meaning of this Annex shall, in the cases specified in Article 22, benefit from the Agreement without it being necessary to submit any of the documents referred to above. Article 16 1. A certificate of origin shall be issued by the customs authorities or competent authorities of the exporting country on application having been made in writing by the exporter or, under the exporter's responsibility, by his authorised representative. 2. For this purpose, the exporter or his authorised representative shall complete both the certificate of origin and the application form, specimens of which appear in Appendix III. These forms shall be completed in English, in accordance with the provisions of the domestic law of the exporting country. If they are handwritten, they shall be completed in ink in block letters. The description of the products must be given in the box reserved for this purpose without leaving any blank lines. Where the box is not completely filled, a horizontal line must be drawn below the last line of the description, the empty space being crossed through. 3. The exporter applying for the issue of a certificate of origin shall be prepared to submit at any time, at the request of the customs authorities or competent authorities of the exporting country where the certificate of origin is issued, all appropriate documents proving the originating status of the products concerned as well as the fulfilment of the other requirements of this Annex. 4. A certificate of origin shall be issued by the customs authorities or competent authorities of MERCOSUR or of SACU if the products concerned can be considered as products originating in MERCOSUR or in SACU and fulfill the other requirements of this Annex. 5. The customs authorities or competent authorities issuing certificates of origin shall take any step necessary to verify the originating status of the products and the fulfillment of the other requirements of this Annex. For this purpose, they shall have the right to call for any evidence and to carry out any inspection of the exporter's accounts or any other check considered appropriate. They shall also ensure that the forms referred to in paragraph 2 are duly completed. In particular, they shall check whether the space reserved for the description of the products has been completed in such a manner as to exclude all possibility of fraudulent additions. 6. The date of issue of the certificate of origin shall be indicated in Box 11 of the certificate. 7. A certificate of origin shall be issued by the customs authorities or competent authorities and made available to the exporter as soon as actual exportation has been effected or ensured. Article 17 1. Notwithstanding Article 16(7), a certificate
of origin may exceptionally be issued after exportation of the products
to which it relates if: 2. For the implementation of paragraph 1, the exporter must indicate in his application the place and date of exportation of the products to which the certificate of origin relates, and state the reasons for his request. 3. The customs authorities or competent authorities may issue a certificate of origin retrospectively, if requested by the exporter within six months from the date of the exportation, and only after verifying that the information supplied in the exporter's application agrees with that in the corresponding file. 4. Certificates of origin issued retrospectively must be endorsed with the words "ISSUED RETROSPECTIVELY". 5. The endorsement referred to in paragraph 4 shall be inserted in the "Remarks" box of the certificate of origin. Article 18 1. In the event of theft, loss or destruction of a certificate of origin, the exporter may apply to the customs authorities or competent authorities which issued it for a duplicate made out on the basis of the export documents in their possession. 2. The duplicate issued in this way must be endorsed with the word "DUPLICATE". 3. The endorsement referred to in paragraph 2 shall be inserted in the "Remarks" box of the duplicate certificate of origin . 4. The duplicate, which shall indicate the date of issuance and the number of the original certificate in the "Remarks" box, shall take effect as from that date. Article 19 1. A certificate of origin shall be valid for six months from the date of issue in the exporting country, and must be submitted within the said period to the customs authorities of the importing country. 2. Certificates of origin which are submitted to the customs authorities of the importing country after the final date for presentation specified in paragraph 1 may be accepted for the purpose of applying preferential treatment, where the failure to submit these documents by the final date set is due to exceptional circumstances. 3. In other cases of belated presentation, the customs authorities of the importing country may accept the certificates of origin where the products have been submitted before the said final date. Article 20 Certificates of origin shall be submitted to the customs authorities of the importing country in accordance with the procedures applicable in that country. The said authorities may require a translation of a certificate of origin and may also require the import declaration to be accompanied by a statement from the importer to the effect that the products meet the conditions required for the implementation of the Agreement. Article 21 Where, at the request of the importer and on the conditions laid down by the customs authorities of the importing country, dismantled or non-assembled products within the meaning of General Rule 2(a) of the Harmonized System falling within Sections XVI and XVII, Chapter 90 or headings 7308 and 9406 of the Harmonized System are imported by instalments, a single certificate of origin for such products shall be submitted to the customs authorities upon importation of the first instalment. Article 22 1. Products sent as small packages from private persons to private persons or forming part of travellers' personal luggage shall be admitted as originating products without requiring the submission of a certificate of origin, provided that such products are not imported by way of trade and have been declared as meeting the requirements of this Annex and where there is no doubt as to the veracity of such a declaration. In the case of products sent by post, this declaration can be made on the customs declaration CN22 / CN23 or on a sheet of paper annexed to that document. 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 products that no commercial purpose is intended. 3. In case of small packages or products forming part of travellers' personal luggage, the total value of these products shall not exceed the value stipulated in the national legislation of the Signatory Party concerned. Article 23 The documents referred to in Articles 16(3)
used for the purpose of proving that products covered by a certificate
of origin can be considered as products originating in MERCOSUR or in
SACU and fulfil the other requirements of this Annex may consist inter
alia of the following: Article 24 1. The exporter applying for the issue of a certificate of origin shall keep for at least three years the documents referred to in Article 16(3). 2. The customs authorities or competent authorities of the exporting country issuing a certificate of origin shall keep for at least three years the application form referred to in Article 16(2). 3. The customs authorities or competent authorities of the importing country shall ensure the availability, for at least three years, of the certificates of origin submitted to the customs authorities. Article 25 1. The discovery of slight discrepancies between the statements made in the certificate of origin and those made in the documents submitted to the customs office for the purpose of carrying out the formalities for importing the products shall not ipso facto render the certificate of origin null and void if it is duly established that this document does correspond to the products submitted. 2. Obvious formal errors on a certificate of origin should not cause this document to be rejected if these errors are not such as to create doubts concerning the correctness of the statements made in this document . TITLE V Article 26 The customs authorities or competent authorities of SACU and MERCOSUR shall provide each other, through the MERCOSUR Secretariat or the SACU Secretariat, with specimen impressions of stamps used for the issue of certificates of origin, with a specimen of an original certificate of origin form and with the addresses of the customs authorities or competent authorities responsible for verifying certificates of origin. Article 27 1. In order to ensure the proper application of this Annex, MERCOSUR and SACU shall assist each other, through the customs authorities or competent authorities, in checking the authenticity of the certificates of origin and the correctness of the information given in these documents. 2. Subsequent verifications of certificates of origin shall be carried out at random or whenever the customs authorities or competent authorities of the importing country have reasonable doubts as to the authenticity of such documents, the originating status of the products concerned or the fulfilment of the other requirements of this Annex. 3. For the purposes of implementing the provisions of paragraph 1, the customs authorities or competent authorities of the importing country shall return the certificate of origin, if it has been submitted, or a copy of these documents, to the customs authorities or competent authorities of the exporting country giving, where appropriate, the reasons for the enquiry. Any documents and information obtained suggesting that the information given on the certificate of origin is incorrect shall be forwarded in support of the request for verification. 4. The verification shall be carried out by the customs authorities or competent authorities of the exporting country. For this purpose, they shall have the right to call for any evidence and to carry out any inspection of the exporter's accounts or any other check considered appropriate. 5. If the customs authorities of the importing country decide to suspend the granting of preferential treatment to the products concerned while awaiting the results of the verification, release of the products shall be offered to the importer subject to any precautionary measures judged necessary. 6. The customs authorities or competent authorities requesting the verification shall be informed of the results of this verification as soon as possible. These results must indicate clearly whether the documents are authentic and whether the products concerned can be considered as products originating in MERCOSUR or in SACU and fulfil the other requirements of this Annex. 7. If in cases of reasonable doubt there is no reply within ten months of the date of the verification request or if the reply does not contain sufficient information to determine the authenticity of the document in question or the real origin of the products, the requesting customs authorities shall, except in exceptional circumstances, refuse entitlement to the preferences. 8. The requesting customs authorities or competent authorities shall inform the customs authorities or competent authorities of the exporting country of its decision on the basis of the verification in question. Article 28 1. Where disputes arise in relation to the verification procedures of Article 27 which cannot be settled between the customs authorities or competent authorities requesting a verification and the customs authorities or competent authorities responsible for carrying out this verification or where they raise a question as to the interpretation of this Annex, they shall be submitted to the Joint Administration Committee, without prejudice to the Parties´ rights to have recourse to the Dispute Settlement mechanism of this Agreement. 2. In all cases the settlement of disputes between the importer and the customs authorities of the importing country shall be under the legislation of the said country. Article 29 Penalties shall be imposed on any person who draws up, or causes to be drawn up, a document which contains incorrect information for the purpose of obtaining a preferential treatment for products. TITLE VI Article 30 The Appendices to this Annex shall form an integral part thereof. Article 31 The provisions of the Agreement may be applied to goods which comply with the provisions of this Annex and which on the date of entry into force of the Agreement are either in transit or are in MERCOSUR or in SACU in temporary storage in customs warehouses or in free zones, subject to the submission to the customs authorities of the importing country, within six months of the said date, of a certificate of origin issued retrospectively by the customs authorities or competent authorities of the exporting country together with the documents showing that the goods have been transported directly in accordance with the provisions of Article 11. Article 32 No later than three years after the entry into force of the Agreement, or in the event of a new round of negotiations intended to deepen or broaden the scope of the Preferential Trade Agreement, the Joint Administration Committee shall review this Annex and, as appropriate, propose to the Parties amendments to the criteria for the determination, application and administration of origin. Understanding between SACU and MERCOSUR on Conclusion of their Preferential Trade Agreement We express great satisfaction with the signing of the MERCOSUR-SACU Preferential Trade Agreement and reaffirm our commitment to pursuing further negotiations and enhancing bilateral cooperation aimed at facilitating the implementation of the Agreement. We recognise that this is a significant step forward in achieving the objective set out in the Framework Agreement to establish a Free Trade Agreement between the two regions. 2. We instruct the aforementioned negotiations to begin as soon as possible and to include different areas, in particular customs cooperation, the automotive sector, sanitary and phytosanitary issues, and rules of origin. 3. For customs cooperation and the automotive sector, we envisage concluding additional protocols of the Preferential Trade Agreement. For sanitary and phytosanitary issues and origin, we propose that meetings be held at the technical level to discuss specific issues of interest to the Parties that may promote more effective implementation of the Agreement in these areas, including the possibility of an SPS Protocol. With regard to the Annex on origin, which is essential for trade preferences to be made effective, discussions will include the consideration of amendments. 4. We also commit ourselves to broaden and deepen this Agreement, including further exchanges of trade preferences in a mutually beneficial and balanced manner. We instruct negotiations to begin as soon as possible, including, among others, the fisheries sector, with priority attention to the product interests of the smaller Members of both customs unions. 5. We recognise that some SACU Members have yet to conclude their internal processes required to secure authorisation for the adoption of the Agreement. As such, we provide a ninety (90) day time-frame (until 16 March 2005) within which such processes may be concluded and the signing effected. Done on 16 December 2004 in Belo Horizonte. |