Copyright
2005
InterAmSM Database
Official Gazette (
The
THE
The Governments of
SHARING a common determination to fulfil within the shortest possible
time the hopes and aspirations of their peoples of other
CONSCIOUS that these goals can most rapidly be attained by the optimum
use of available human and other resources and by accelerated and sustained
economic development;
AWARE that the broadening of domestic markets through the elimination of
barriers to trade between the territories is a prerequisite to such
development;
CONVINCED that such elimination of barriers to trade can best be
achieved by the immediate establishment of a Free Trade Economic Community for
all the countries who so desire;
HAVE AGREED as follows:-
ARTICLE 1
ASSOCIATION
1. An Association to be called the Caribbean Free Trade Association
(hereinafter referred to as "the Association") is hereby established.
2. The Members of the Association, hereinafter referred to as "
3. The institutions of the Association shall be a Council and such
organs as the Council may set up.
4. The
ARTICLE 2
OBJECTIVES
The objectives of the Association shall be
a) to promote the expansion and diversification of trade in the area of
the Association;
(b) to secure that trade between member territories takes place in
conditions of fair competition;
(c) to encourage the progressive development of the economies of the
Area;
(d) to foster the harmonious development of
ARTICLE 3
EXCLUSION FROM THIS AGREEMENT
The provisions of the Agreement shall not affect the rights and
obligations under any agreements entered into by any of the parties to this
agreement before it is signed:
Provided, however, that each Party shall take any steps at its disposal
which are necessary to reconcile the provisions of any such agreements with the
purposes of this Agreement.
ARTICLE 4
IMPORT DUTIES
1. Subject to the provisions of Annex A,
2. For the purposes of this Article and Annex A, the term "import
duties" means any tax or surtax of customs and any other charges of
equivalent effect - whether fiscal, monetary or exchange - which are levied on
imports, except duties notified under Article 7 and other charges which fall
within that Article.
3. The provisions of this Article do not apply to fees and similar
charges in respect of services rendered.
ARTICLE 5
1. For the purposes of Articles 4 - 8, goods shall, subject to Annex B,
be accepted as eligible for Area tariff treatment if they are consigned from a
Member Territory to a consignee in the importing Member Territory and if they
are of Area origin under any one of the following conditions -
(a) that they have been wholly produced within the area;
(b) that they fall within a description of goods listed in a process
list to be established by decision of the Council and have been produced within
the area by the appropriate qualifying process described in that List;
(c) that they have been produced within the Area and that the value of
any materials imported from outside the Area or of undetermined origin which
have been used at any stage of the production of the good does not exceed 50
percent of the export price of the goods.
2. For the purposes of sub-paragraphs (a), (b) and (c) of paragraph 1 of
this Article, materials listed in the Basic Materials List which forms the
schedule to Annex B, which have been used in the state described in that List
in a process of production within the Area, shall be deemed to contain no
element imported from outside the Area.
3. Nothing in this agreement shall prevent a Member Territory from
accepting as eligible for Area tariff treatment any imports consigned from
another Member Territory, provided that the like imports consigned from any
Member Territory are accorded the same treatment.
4. Provisions necessary for the administration and effective application
of this Article are contained in Annex B.
5. The Council may decide to amend the provisions of this Article, Annex
B and the Process List established under sub-paragraph (b) of paragraph 1 of
this Article.
6. The Council shall from time to time examine in what respect this
Agreement can be amended in order to ensure the smooth operation of the origin
rules.
ARTICLE 6
DEFLECTION OF TRADE
1. For the purpose of this Article, trade is said to be deflected when-
(a) imports into a
(i) as a result of the reduction or elimination in the importing Member
Territory of duties and charges in that product in accordance with Article 4 or
7, and
(ii) because the duties or charges levied by the exporting Member
territory on imports of raw materials or intermediate products, used in the
production of the product in by the importing Member Territory, and
(b) this increase in imports causes or would cause serious injury to
production which is carried on in the importing
2. The Council shall keep under review the question of deflections of
trade and their causes. It shall take such decisions as are necessary in order
to deal with the causes of deflection of trade by amending the rules of origin
in accordance with paragraph 5 or Article 5 or by such other means as it may
consider appropriate.
3. If a deflection of trade of a particularly urgent nature occurs, any
Member Territory may refer the matter to the Council. The Council shall take
its decision as quickly as possible and, in general within one month. The
Council may, by majority decision, authorise interim measures to safeguard the
position of the
4. A Member Territory which is considering the reduction of the
effective level of its duties or charges on any product not eligible for Area
tariff treatment shall, as far as may be practicable, notify the Council not
less than thirty (30) days before such reduction comes into effect, and shall
consider any representations by other Member Territories that the reduction is
likely to lead to a deflection of trade. Information received under this
paragraph shall not be disclosed to any person outside the service of the
Association or the Governments of Member Territories.
5. When considering changes in their duties or charges on any product
not eligible for Area tariff treatment,
6. If, in the consideration of any complaint in accordance with Article
26, reference is made to a difference in the level of duties or charges on any
product not eligible for Area tariff treatment, that difference shall be taken
into account only if the Council finds by a majority vote that there is a
deflection of trade.
7. The Council shall review from time to time the provisions of this
Article and may decide to amend those provisions.
ARTICLE 7
REVENUE DUTIES
1. Subject to the provisions of Annex C,
(a) apply directly or indirectly to imported goods any fiscal charges in
excess of those applied directly or indirectly to like domestic goods, nor
otherwise apply such charges so as to afford effective protection to like
domestic goods; or
(b) apply fiscal charges to imported goods of a kind which they do not
produce, or which they do not produce in substantial quantities, in such a way
as to afford effective protection to the domestic production of goods of a
different kind which are substitutable for the imported goods, which enter into
direct competition with them which do not bear, directly or indirectly, in the
country of importation, fiscal charges of equivalent incidence.
2. A Member Territory shall notify the Council of all fiscal charges
applied by it where, although the rates of charge, or the conditions governing
the imposition or collection of the charge, are not identical in relation to
the imported goods and to the like domestic goods, the Member Territory
applying the charge considers that the charge is, or has been made, consistent
with sub-paragraph (a) of paragraph 1 of this Article. Each
3. For the purposes of this Article and Annex C -
(a) "fiscal charges" means revenue duties, internal taxes and
other internal charges on goods;
(b) "revenue duties" means customs duties and other similar
charges applied primarily for the purpose of raising revenue; and
(c) "imported goods" means goods which are accepted as being
eligible for area tariff treatment in accordance with Article 5.
ARTICLE 8
EXPORT DRAWBACK
Each
For the purpose of this Article-
(a) "export drawback" means any arrangement for the refund or
remission, wholly or in part, of import duties applicable to imported
materials, provided that the arrangement, expressly or in effect, allows refund
or remission if certain goods or materials are exported, but not if they are
retained for home use;
(b) "remission" includes exemption from duties for materials
brought into free ports and other places which have similar customs privileges;
(c) "duties" means (i) all charges on or in connection with
importation, except fiscal charges to which Article 7 applies and (ii) any
protective element in such fiscal charges;
(d) "materials" and "process of production" have the
meanings assigned to them in Rule 1 of Annex B.
ARTICLE 9
PROHIBITION OF EXPORT DUTIES
1.
2. The provisions of this article shall not prevent any
3. For the purposes of this Article, "export duties" means any
duties or charges with equivalent effect imposed on or in connection with the
exportation of goods from any
ARTICLE 10
CO-OPERATION IN CUSTOMS ADMINISTRATION
Member Territories shall take appropriate measures, including arrangements
regarding administrative co-operation, to ensure that the provisions of
Articles 4 to 8 and of Annexes A, B and C are effectively and harmoniously
applied, taking account of the need to reduce as far as possible the
formalities imposed on trade and of the need to achieve mutually satisfactory
solution of any difficulties arising out of the operation of those provisions.
ARTICLE 11
FREEDOM OF TRANSIT
Products imported into, or exported from, a
ARTICLE 12
DUMPED
1. Nothing in this Agreement shall prevent any
2. Any products which have been exported from one
3. If any industry in any Member Territory is suffering or is threatened
with material injury as the result of the import of dumped or subsidised
products into another Member Territory, the latter Member Territory shall, at
the request of the former Member Territory, examine the possibility of taking,
consistently with any international obligations to which it is subject, action
to remedy the injury or prevent the threatened injury.
ARTICLE 13
QUANTITATIVE IMPORT RESTRICTIONS
1. Subject to the provisions of Annex D, a
2. For the purposes of the proceeding paragraph and Annex D,
"Quantitative restrictions" means prohibitions or restrictions
on imports into any
3. The provisions of this article shall not prevent any Member territory
from taking such measures are as necessary to prevent evasion of any prohibitions
or restrictions which it applies to imports from territories outside the area.
ARTICLE 14
QUANTITATIVE EXPORT RESTRICTIONS
1. A Member Territory shall not apply any prohibitions or restrictions
on exports to any other part of the Area, whether made effective through quotas
or export licences or other measures with equivalent effect.
2. The provisions of this Article shall not prevent any
ARTICLE 15
GENERAL EXCEPTIONS
Provided that such measures are not used as a means of arbitrary or
unjustifiable discrimination between
(a) necessary to protect public morals;
(b) necessary for the prevention of disorder or crime;
(c) necessary to protect human, animal or plant life or health;
(d) necessary to secure compliance with laws or regulations relating to
customs enforcement, or to the classification, grading or marketing of goods,
or to the operation of monopolies by means of state enterprises or enterprises
given exclusive or special privileges;
(e) necessary to protect industrial property or copyrights or to prevent
deceptive practices;
(f) relating to gold or silver;
(g) relating to the products of prison labour;
(h) imposed for the protection of national treasures of artistic,
historic or archaeological value; or
(i) necessary to prevent or relieve critical shortages of foodstuffs in
any exporting
ARTICLE 16
SECURITY EXCEPTIONS
Nothing in the Agreement shall prevent any
(a) is taken to prevent the disclosure of information;
(b) relates to trade in arms, ammunition or war materials or to
research, development or production indispensable for defence purposes,
provided that such action does not include the application of import duties or
the quantitative restriction of imports except in so far as such restriction is
permitted in accordance with Article 15 or is authorised by decision of the
council;
(c) is taken to ensure that nuclear materials and equipment made
available for peaceful purposes do not further military purposes; or
(d) is taken in time of war or other emergency in international
relations.
2. Nothing in this Agreement shall prevent any
ARTICLE 17
GOVERNMENT AIDS
1. A Member territory shall not maintain or introduce-
(a) the forms of aid to export of goods to any other part of the Area of
the kinds which are described in Annex E; or
(b) any other form of aid, the main purpose or effect of which is to
frustrate the benefits expected from such removal or absence of duties and
quantitative restrictions as is required by this agreement.
2. If the application of any form of aid by a Member territory, although
not contrary to paragraph 1 of this Article , frustrates the benefits expected
from such removal or absence of duties and quantitative restrictions as is
required by this Agreement and provided that the procedure set out in
paragraphs 1 to 3 of Article 26 has been followed, the Council may, by majority
decision, authorise any Member Territory to suspend to the Member Territory
which is supplying aid, the application of such obligations under this
Agreement as the Council considers appropriate.
3. The Council may decide to amend the provisions of this Article and of
Annex B.
ARTICLE 18
PUBLIC UNDERTAKINGS
1.
(a) measures the effect of which is to afford protection to domestic
production which would be inconsistent with this Agreement if achieved by means
of a duty or charge with equivalent effect or quantitative restriction or
government aid; or
(b) trade discrimination on grounds of Territorial origin in so far as
it frustrates the benefits expected from such removal or absence of duties and
quantitative restrictions as is required by this Agreement.
2. In so far as the provisions of Article 19 are relevant to the
activities of public undertakings, that Article shall apply to them in the same
way as it applies to other enterprises.
3.
4. Where Member Territories do not have the necessary legal powers to control
the activities of regional or local government authorities or enterprises under
their control in these matters, they shall nevertheless endeavour to ensure
that those authorities or enterprises comply with the provisions of this
Article.
5. The Council shall keep the provisions of this Article under review
and may decide to amend them.
6. For the purpose of this Article, "public undertakings"
means central, regional or local government authorities, public enterprises and
any other organisation by means of which a Member Territory by law or in
practice controls or appreciably influences imports from, or exports to, any
other part of the Area.
ARTICLE 19
RESTRICTIVE BUSINESS PRACTICES
1.
(a) agreement between enterprises, decisions by association of enterprises
and concerted practices between enterprises which have as their object or
result the prevention, restriction or distortion of competition within the
area;
(b) actions by which one or more enterprises take unfair advantage of a
dominant position within the Area or a substantial part of it.
2. If any practice of the kind described in paragraph 1 of this Article
is referred to the Council in accordance with Article 26, the Council may, in
any recommendation in accordance with paragraph 3 or in any decision in
accordance with paragraph 4 of that Article, make provision for publication of
a report on the circumstances of the matter.
3. (a) In the light of experience gained, the Council shall consider
before 31st December,1967, and may consider at any time thereafter whether
further or different provisions are necessary to deal with the effect of
restrictive business practices or dominant enterprises on the inter-territorial
trade of the Area.
(b) Such review shall include consideration of the following matters -
(i) specification of the restrictive business practices or dominant
enterprises with which the Council should be concerned;
(ii) methods of securing information about restrictive business
practices or dominant enterprises;
(iii) procedures for investigations;
(iv) whether the right to initiate inquiries should be conferred on the
Council.
(c) The Council may decide to make the provisions found necessary as a
result of the review envisaged in sub-paragraphs (a) and (b) of this paragraph.
ARTICLE 20
ESTABLISHMENT
1. Each Member Territory recognises that restrictions on the
establishment and operation of economic enterprises therein by persons
belonging to other Member Territories should not be applied, through accord to
such persons of treatment which is less favourable than that accorded in such
matters to persons belonging to that Member Territory, in such a way as to
frustrate the benefits expected from such removal or absence of duties and
quantitative restrictions as is required by this Agreement.
2.
3. A Member Territory shall notify the Council within such period as the
Council may decide of particulars of any restrictions which it applies in such
a way that persons belonging to another Member Territory are accorded in the
first-mentioned Territory less favourable treatment in respect of the matters
set out in paragraph 1 of this Article than is accorded to persons belonging
thereto.
4. The Council shall consider before
5. Nothing in this Article shall prevent the adoption and enforcement by
a
6. For the purposes of this Article-
(a) a person shall be regarded as belonging to a
(i) is a citizen of that Territory;
(ii) has a connection with that Territory of a kind which entitles him
to be regarded as belonging to, or, if it be so expressed, as being a native
of, the Territory for the purpose of such laws thereof relating to immigration
as are for the time being in force ; or
(iii) is a company or other legal person constituted in the Member
Territory in conformity with the law thereof and which that territory regards
as belonging to it, provided that such company or other legal person has been formed
for gainful purposes and has its registered office and central administration,
and carries on substantial activity, within the Area;
(b) "economic enterprises" means any type of economic
enterprises for production of or commerce in goods which are of Area origin,
whether conducted by individuals or through agencies, branches or companies or
other legal persons.
ARTICLE 21
BALANCE OF PAYMENTS DIFFICULTIES
1. Notwithstanding the provisions of Article 13 any
2. Any Member Territory taking measures in accordance with paragraph 1
of this Article shall notify them to the Council, if possible before they come
into force. The Council shall examine the situation and keep it under review
and may at any time by majority vote make recommendations designed to moderate
any damaging effect of these restrictions or to assist the
3. A Member Territory which has taken measures in accordance with
paragraph 1 of this Article shall have regard to its obligation to resume the
full application of Article 13 and shall, as soon as its balance of payments
situation improves, make proposals to the Council on the way in which this
should be done. The Council, if it is not satisfied that these proposals are
adequate, may recommend to the
ARTICLE 22
DIFFICULTIES IN PARTICULAR SECTORS
1. If, in a
(a) an appreciable rise in the unemployment in a particular sector of
industry or region is caused by a substantial decrease in internal demand for a
domestic product, and
(b) this decrease in demand is due to an increase in imports consigned
from other Member Territories as a result of the progressive reduction or the
elimination of duties, charges and quantitative restrictions in accordance with
Articles 4, 7 and 13, that Member Territory may, notwithstanding any other
provisions of this Agreement -
(i) limit those imports by means of quantitative restrictions to a rate
not less than the rate of such imports during any period of twelve months which
ended within twelve months of the date on which the restrictions come into
force; the restrictions shall not be continued for a period longer than
eighteen months, unless the Council, by majority decision, authorises their
continuance for such further period and on such conditions as the Council considers
appropriate; and
(ii) take such measures, either instead of or in addition to restriction
of imports in accordance with sub-paragraph (i) of this paragraph, as the
Council may, by majority decision, authorise.
2. In applying measures in accordance with paragraph 1 of this Article,
a
3. A Member Territory applying restrictions in accordance with
sub-paragraph (i) of this Article shall notify them to the Council, if possible
before they come into force. The Council may at any time consider those
restrictions and may, by majority vote make recommendations designed to
moderate any damaging effect of those restrictions or to assist the Member
State concerned to overcome its difficulties.
4. This article shall have effect until
5. Before
ARTICLE 23
APPROXIMATION OF INCENTIVE LEGISLATION
1. A Tax of any kind in a Member Territory shall not, by the
introduction or extension of incentive provisions at any time after this
Agreement takes effect, be rendered liable to mitigation to any extent to which
no tax of that kind elsewhere in the Area (if any) is rendered by incentive
provisions previously introduced or extended, liable to mitigation.
2. A Member Territory which is considering the introduction or
alteration of any incentive provisions shall, as far as may be practicable,
notify the Council not less than thirty days before such introduction or
alteration comes into effect, and shall consider any representations with
respect thereto by other Member Territories, any of which may refer the matter
to the Council under Article 26 if a breach of this Article is apprehended.
Information received under this paragraph shall not be disclosed to any person
outside the service of the Association or the Governments of Member
Territories.
3. The Council may on its own initiative recommend to
4. The Council may from time to time review the provisions of this
Article and may decide to amend those provisions.
5. For the purposes of this Article -
"incentive provisions" means any legislation or practice
providing for the granting of concessions for the purpose of encouraging the
establishment or development of manufacturing industry;
"concessions" means any tax exemptions or remissions or
refunds of tax;
"tax" includes any impost, duty or due.
ARTICLE 24
ECONOMIC
ARTICLE 25
INVISIBLES
ARTICLE 26
GENERAL CONSULTATIONS
1. If any
2. The Council shall promptly, by majority vote, make arrangements for
examining the matter. Such arrangements may include a reference to an examining
committee constituted in accordance with Article 27. Before taking action under
paragraph 3 of this Article, the Council shall so refer the matter at the
request of any
3. When considering the matter, the Council shall have regard to whether
it has been established that an obligation under this agreement has not been
fulfilled and whether and to what extent any benefit conferred by this
Agreement or any objective of the Association is being or may be frustrated. In
the light of this consideration and of the report of any examining committee
which may have been appointed, the Council may, by majority vote, make to any
4. If a Member Territory does not or is unable to comply with a
recommendation made in accordance with paragraph 3 of this Article and the
Council finds, by majority vote, that an obligation under this Agreement has
not been fulfilled, the Council may, by majority decision, authorise any Member
Territory to suspend to the Member territory which has not complied with the
recommendation the application of such obligations under this Agreement as the
Council considers appropriate.
5. Any Member Territory may, at any time while the matter is under
consideration, request the Council to authorise as a matter of urgency, interim
measures to safeguard its position. If it is found by majority vote of the
Council that the circumstances are sufficiently serious to justify interim
action, and without prejudice to any action which it may subsequently take in
accordance with the preceding paragraphs of this Article, the Council may, by
majority decision, authorise a Member Territory to suspend its obligations
under this Agreement to such an extent and for such a period as the Council
considers appropriate.
ARTICLE 27
EXAMINING COMMITTEES
The examining committees referred to in Article 26 shall consist of
persons selected for their competence and integrity, who, in the performance of
their duties, shall neither seek nor receive instructions from any Territory or
from any authority or organisation other than the Association. They shall be
appointed, on such terms and conditions as may be decided, by majority vote of
the Council.
ARTICLE 28
THE COUNCIL
1. It shall be the responsibility of the Council -
(a) to exercise such powers and functions as are conferred upon it by
this Agreement;
(b) to supervise the application of this Agreement and keep its
operation under review;
(c) to consider whether further action should be taken by Member
Territories in order to promote the attainment of the objectives of the
Association and to facilitate the establishment of closer links with other
countries, unions of countries or international organisations.
2. Each Member Territory shall be represented in the Council and shall
have one vote.
3. The Council may decide to set up such organs, committees and other
bodies as it considers necessary to assist it on accomplishing its tasks.
4. In exercising its responsibility under paragraph 1 of this Article,
the Council may take decisions which shall be binding on all
5. Decisions and recommendations of the Council shall be made by
unanimous vote, except in so far as this Agreement provides otherwise.
Decisions or recommendations shall be regarded as unanimous unless any
ARTICLE 29
ADMINISTRATIVE ARRANGEMENTS OF THE ASSOCIATION
1. The Council shall take decisions for the following purposes -
(a) to lay down the Rules of Procedure of the Council and of any bodies
of the Association, which may include provision that procedural questions may
be decided by majority vote;
(b) to make arrangements for the Secretariat services required by the
association;
(c) to establish the financial arrangements necessary for the
administrative expenses of the Association and the procedure for establishing
an annual budget.
2. The expenses of the Association shall be shared equally between the
ARTICLE 30
RELATIONS WITH INTERNATIONAL ORGANISATIONS
The Council, acting on behalf of the Association, shall seek to procure
the establishment of such relationships with other international organisations
as may facilitate the attainment of the objectives of the Association.
ARTICLE 31
RATIFICATION REQUIRED FOR EFFECTIVENESS
1. This Agreement shall be subject to ratification by the Legislatures
of all the
2. Instruments signifying such ratification shall be deposited with the
Government of Antigua, which shall notify the other
3. If prior to the ratification of this Agreement by any Signatory
Territory that Territory indicates by notice to the Government of Antigua that
difficulties have arisen in relation to carrying any provision of this
Agreement into effect, the Agreement shall not take effect with respect to that
Territory except in accordance with the terms of a supplementary agreement
between all the signatory Territories providing for the resolution of such
difficulties.
ARTICLE 32
JOINING ASSOCIATION
1. Any Territory, though it be not a signatory hereto, may participate
in this Agreement, subject to prior approval of the Council of the Territory's
participation in this Agreement on terms and conditions decided by the Council.
The instrument duly signifying the agreement of the Government of the Territory
to its participation in this Agreement on the terms and conditions decided as
aforesaid shall be deposited with the Government of Antigua which shall notify
all other Member territories. This Agreement shall have effect in relation to
the participating Territory as, and from the time, indicated in the Council's
decision.
2. The Council may seek to procure the creation of an association
consisting of
3. For the purpose of this Article, "Territory" includes a
sovereign state internationally recognised.
ARTICLE 33
WITHDRAWAL
Any
ARTICLE 34
AMENDMENT
Except where provision for modification is made elsewhere in this
agreement, including the Annexes to it, an amendment to the provisions of this
Agreement shall be submitted to the Governments of Member Territories for
acceptance if it is approved by decision of the Council, and it shall have
effect provided it is accepted by all such Governments. Instruments of
acceptance shall be deposited with the Government of Antigua which shall notify
the other
ARTICLE 35
ACQUISITION OF SOVEREIGN STATUS
1. If a
2. For the purposes of paragraph 1 of this Article, any intimation
thereunder shall be given by notice to the Government of Antigua, which shall
notify all other
ARTICLE 36
ANNEXES
The annexes to this Agreement are an integral part of this Agreement.
ARTICLE 37
LEGAL CAPACITY, PRIVILEGES
1. The legal capacity, privileges and immunities to be recognised and
granted by the
2. The Council, acting on behalf of the Association, may conclude with
the Government of the Territory in which the headquarters will be situated an
agreement relating to the legal capacity and the privileges and immunities to
be recognised and granted in connection with the Association.
IN WITNESS whereof the undersigned, duly authorised, have signed the
present Agreement for the Governments of Antigua, Barbados and
Done at
Signed by V.C. Bird , Chief Minister
For the Government of
Signed by E.W. Barrow, Premier
For the Government of
Signed by L.F.S. Burnham, Premier
For the Government of
ANNEX "A"
1. Special arrangements are provided in this Annex for the progressive
elimination by
SITC Item No. Description of Product
533-03 Prepared paints, enamels, lacquer and varnishes
552-02 Cleansing preparations without soap (detergents)
641-05 Bagasse board
821-01 Wood furniture
821-02 Metal furniture
821-09 Matresses
841-02 Underwear and shirts of knitted fabrics
841-04 Underwear, shirts and pajamas other than knitted
2. On and after each of the following dates a Member Territory may apply
an import duty on any product eligible for Area tariff treatment as mentioned
in paragraph 1 of this Annex at a level not exceeding the percentage of the
basic duty specified against that date -
Effective date hereof 100 per cent
3. For the purpose of this Annex -
"basic duty" means, in respect of any product imported into a
Member territory, the import duty applicable in that Territory on
ANNEX "B"
Rules regarding area origin for tariff purposes
For the purpose of determining the origin of goods under Article 5 and
for the application of that Article, the following Rules shall be applied:
Rule 1 - Interpretative Provisions
1. In determining the place of production of marine products and goods
produced therefrom, a vessel of a
2. A vessel which is registered shall be registered as a vessel of the
3. "Materials" includes products, parts and components used in
the production of the goods.
4. Energy, fuel, plant, machinery and tools used in the production of
goods within the Area, and materials used in the maintenance of such plant,
machinery and tools, shall be regarded as wholly produced within the Area when
determining the origin of those goods.
5. "Produced" in sub-paragraph (c) of paragraph 1 of Article 5
and a "Process of production" in paragraph 2 of that Article include
the application of any operation or process, with the exception of any
operation or process which consists only of one or more of the following :-
(a) packing, wherever the packing materials may have been produced;
(b) splitting up into lots;
(c) sorting and grading;
(d) marking;
(e) putting up into sets.
6. The term "producer" includes a grower and a manufacturer
and also a person who supplies his goods otherwise than be sale to another
person and to whose order the last process in the course of the manufacturer of
the goods is applied by that other person.
Rule 2 - Goods wholly produced within the Area
For the purposes of sub-paragraph (a) of paragraph 1 of Article 5, the
following are among the products which shall be regarded as wholly produced
within the Area:-
(a) mineral products extracted from the ground within the Area;
(b) vegetable products harvested within the Area;
(c) live animals born and raised within the Area;
(d) products obtained within the Area from live animals;
(e) products obtained by hunting or fishing conducted within the Area;
(f) marine products taken from the sea by a vessel of a
(g) used articles fit only for the recovery of materials, provided that
they have been collected from users within the Area;
(h) scrap and waste resulting from manufacturing operations within the
Area;
(i) goods produced within the Area exclusively from one or both of the
following:-
(1) products within sub-paragraphs (a) to (h);
(2) materials containing no element imported from outside the Area or of
undetermined origin.
Rule 3 - Application of Percentage Criterion
For the purposes of sub-paragraph (c) of paragraph 1 of article 5 -
(a) Any materials which meet the conditions specified in sub-paragraph
(a) or (b) of paragraph 1 of that Article shall be regarded as containing no
element imported from outside the Area.
(b) The value of any materials which can be identified as having been
imported from outside the Area shall be their c.i.f. value accepted by the
customs authorities on clearance for home use, or on temporary admission, at
the time of last importation into the Member Territory where they were used in
a process of production, less the amount of any transport costs incurred in
transit through other Member Territories.
(c) If the value of any materials imported from outside the area cannot
be determined in accordance with sub-paragraph (b) of this rule, their value
shall be the earliest ascertainable price paid for them in the
(d) If the origin of any materials cannot be determined, such materials
shall be deemed to have been imported from outside the Area and their value
shall be the earliest ascertainable price paid for them in the
(e) The export price of the goods shall be the price paid or payable for
them to the exporter in the
(f) The value under sub-paragraphs (b), (c) or (d) or the export price
under sub-paragraph (e) of this Rule may be adjusted to correspond with the
amount which would have been obtained on a sale in the open market between
buyer and seller independent of each other. This amount shall also be taken to
be the export price when the goods are not the subject of a sale.
Rule 4 - Unit of Qualification
1. Each article in a consignment shall be considered separately.
2. For the purposes of paragraph 1 of this Rule -
(a) where the original Standard International Trade Classification
specifies that a group, set or assembly of articles is to be classified within
a single item, such a group, set or assembly shall be treated as one article;
(b) tools, parts and accessories which are imported with an article, and
the price of which is included in that of the article or for which no separate
charge is made, shall be considered as forming a whole with the article,
provided that they constitute the standard equipment customarily included on
the sale of articles of that kind;
(c) in cases not within sub-paragraphs (a) and (b), goods shall be
treated as a single article if they are so treated for purposes of assessing
customs duties by the importing
3. An assembled or disassembled article which is imported in more than
one consignment because it is not feasible for transport or production reasons
to import it in a single consignment shall, if the importer so requests, be
treated as one article.
Rule 5 - Segregation of materials
1. For those products or industries where it would be impracticable for
the producer physically to segregate materials of similar character but
different origin used in the production of goods, such segregation may be
replaced by an appropriate accounting system, which ensures that no more goods
received Area tariff treatment than would have been the case if the producer
had been able physically to segregate the materials.
2. Any such accounting system shall conform to such conditions as may be
agreed upon by the
Rule 6 - Treatment of mixtures
1. In the case of mixtures, not being groups, sets or assemblies of
separable articles dealt with under Rule 4, a Member Territory may refuse to
accept as being of Area origin any product resulting from the mixing together
of goods which would qualify as being of Area origin with goods which would not
so qualify, if the characteristics of the products as a whole are not
essentially different from the characteristics of the goods which have been
mixed.
2