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

The President of the Council shall designate the person or persons empowered to proceed, on behalf of the Union, to send the notification provided for in Article 23.3 of the Agreement, in order to express the consent of the Union to be bound by the Agreement.

Modifications of Annex 14-A and Annex 14-B of the Agreement through decisions of the Joint Committee, following recommendations of the Committee on Intellectual Property, shall be approved by the Commission on behalf of the Union. Where interested parties cannot reach an agreement following objections relating to a geographical indication, the Commission shall adopt a position on the basis of the procedure laid down in Article 57(2) of Regulation (EU) No 1151/2012 of the European Parliament and the Council.

For the purposes of Article 10.14 of the Agreement (Modifications and rectifications to coverage), the position of the Union on the modifications or rectifications to commitments under Part 2 of Annex 10 to the Agreement shall be taken by the Commission.

2.The decision of the Union to terminate, in accordance with paragraph 4 of Article 2.29 of the Agreement, the temporary suspension of the acceptance of self-certification of wine products provided for in Article 2.28 shall be taken by the Commission.

1.The decision of the Union to temporarily suspend, in accordance with paragraph 3 of Article 2.29 of the Agreement, the acceptance of self-certification of wine products provided for in Article 2.28 shall be taken by the Commission.

The Economic Partnership Agreement between the European Union and Japan is hereby approved.

(5)In accordance with Article 23.5 of the Agreement, nothing in the Agreement shall be construed as conferring rights or imposing obligations on persons, without prejudice to the rights and obligations of persons under other public international law. The Agreement therefore cannot be directly invoked before the courts of the Union or of the Member States,

(4)Pursuant to Article 218(7) of the TFEU, it is appropriate for the Council to authorise the Commission to approve on the Union's behalf certain modifications to the Agreement. The Commission should therefore be authorised to approve modifications pursuant to Article 10.14 of the Agreement (Modifications and rectifications to coverage) as regards Part 2 of Annex 10 to the Agreement as well as modifications of Annex 14-A and Annex 14-B to the Agreement.

(3)In order to ensure an efficient operation of the wine export facilitation system provided for in the Agreement, it is appropriate for the Council to authorise the Commission to temporarily suspend on behalf of the Union, in accordance with Article 2.29(3) of the Agreement (Review, consultations and temporary suspension of self-certification), the acceptance of self-certification of wine products provided for in Article 2.28. The Commission should be also authorised by the Council to terminate on behalf of the Union the temporary suspension of the acceptance of the self-certification as provided for in Article 2.29(4) of the Agreement.

(2)The Agreement should be approved on behalf of the European Union.

(1)In accordance with Council Decision No [XX], the Economic Partnership Agreement between the European Union and Japan, hereinafter referred to as “the Agreement”, was signed on [XX XXX 2018].

Having regard to the consent of the European Parliament,

Having regard to the proposal from the European Commission,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 91, Article 100(2), and Article 207, in conjunction with Article 218(6)(a)(v) and Article 218(7) thereof,

on the conclusion of the Economic Partnership Agreement between the European Union and Japan

(10)A comprehensive section on the mutual facilitation of wine exports with the approval of several oenological practices including priority additives of each side.

(9)A comprehensive and novel chapter dedicated to SMEs to ensure that they fully benefit from the opportunities offered by the EPA.

(8)A comprehensive chapter on trade and sustainable development, which aims at ensuring that trade supports environmental protection and social development and promotes the sustainable management of forests and fisheries. The chapter also sets out how civil society will be involved in its implementation and monitoring. It also includes a commitment to implement the Paris Agreement on Climate Change as well as a dedicated review mechanism.

(7)High level of protection for EU GIs, with TRIPS Article 23 protection, for more than 200 foodstuffs and wines and spirits EU GIs to be protected under the EPA.

(6)A high level protection of intellectual property rights, including with regard to the enforcement of these rights and including detailed provisions on copyright, providing for improved copyright protection.

(5)For the first time in EU agreements, the EPA will contain provisions on corporate governance to be included in a specific chapter. These provisions are inspired from the OECD Code on corporate governance and reflect the EU's and Japan's best practices and rules in this area.

(4)On services, the EPA includes a chapter on Trade in Services, Investment Liberalisation and Electronic Commerce and the related schedules of commitments, which go significantly beyond both parties' WTO commitments. The chapter includes cross-cutting rules on domestic regulation and mutual recognition, and sector-specific rules designed to ensure a level playing field for EU businesses. As in all its trade agreements, the EU protects public services. On electronic commerce, the chapter contains the most ambitious provisions the EU has ever included in a trade agreement, covering all trade done by electronic means. It reflects the interests that both European and Japanese companies and consumers have in digital trade, while fully safeguarding legitimate policy objectives.

(3)The removal of technical and regulatory trade barriers to trade in goods such as duplicative testing, in particular by promoting the use of technical and regulatory standards used in the EU in the sectors of motor vehicles, electronics, pharmaceuticals and medical devices as well as green technologies. There will also be a specific Motor Vehicles Annex with a safeguard clause, allowing the EU to reintroduce tariffs in case Japan stops applying UNECE Regulations or reinstalls removed NTMs (or develops new ones).

(2)New tendering opportunities for EU bidders, with Japan notably giving us new access to the sub-central level 48 "core cities" with above 300.000 inhabitants, around 15% of Japan’s population and agreeing to eliminate the "Operational Safety Clause" for EU companies active in the railways market one year after the entry into force of the Agreement.

(1)Japan will liberalise 91% of its imports from the EU at entry into force of the Agreement. At the end of the staging period 99% of its imports from the EU will be liberalised, while the remaining imports (1%) will be partly liberalised through quotas and tariff reductions (in agriculture). In terms of tariff lines, Japan fully liberalises 86% of its tariff lines at entry into force, going up to 97% after 15 years. Major positive achievements for the EU include full liberalisation at entry into force for wines and sparkling wines, full liberalisation of other major agri-food exports (hard matured cheeses, pasta, chocolate, confectionery) over a transitional period; very significant concession achieving almost liberalisation for pigmeat over time; substantial improvement of market access conditions for EU exports of beef and all the other cheeses; as well as liberalisation of all European industrial exports, including old-standing priorities such as footwear and leather products.

In line with the objectives set by the negotiating directives, the Commission notably secured:

The agreement satisfies the criteria of Article XXIV GATT (to eliminate duties and other restrictive regulations of commerce with respect to substantially all trade in goods between the parties), as well as of Article V GATS, which provides for a similar test with respect to services.

This objective has been fully met: the Agreement goes beyond existing WTO commitments in many areas, such as services, procurement, non-tariff barriers and the protection of intellectual property rights, including geographical indications (GIs). In all of these areas Japan agreed to new commitments which go significantly beyond what Japan has been so far willing to accept.

In negotiating this Agreement, the Commission ensured to provide the best possible conditions for EU operators on Japan's market.

As announced by President Juncker and Prime Minister Abe at the time of the finalisation of the negotiations: "The EU-Japan EPA is one of the largest and most comprehensive economic agreements that either the EU or Japan have concluded so far. This EPA will create a huge economic zone with 600 million people and approximately 30 percent of the world GDP, and it will open up tremendous trade and investment opportunities and will contribute to strengthening our economies and societies. It will also strengthen economic cooperation between Japan and the EU and reinforce our competitiveness as mature yet innovative economies."

The EPA establishes the conditions for EU economic operators to take full advantage of the opportunities generated by the third largest national market in the world.

As emphasised in the “Trade for All” Communication, the Commission is dedicating increasing resources to the effective implementation and enforcement of trade and investment agreements. In 2017, the Commission published the first annual FTA Implementation Report. The main purpose of the report is to convey an objective picture on the implementation of the EU FTAs, highlighting the progress made and the shortcomings that need to be addressed. The objective is for the report to serve as the basis for an open debate and engagement with Member States, the European Parliament and the civil society at large on the functioning of the FTAs and their implementation. As an annual exercise, the publication of the report will allow regular monitoring of FTA developments, reporting also how identified priority issues have been addressed. The report will cover the EPA as of its entry into force.

The Joint Committee will be in charge of supervising the work of all specialised committees and working groups established under the agreement (Committee on Trade in Goods; Committee on Trade in Services, Investment Liberalisation and Electronic Commerce; Committee on Government procurement; Committee on Trade and Sustainable Development; Committee on Sanitary and Phytosanitary Measures; Committee on Rules of Origin and Custom-Related Matters; Committee on Intellectual Property; Committee on Regulatory Cooperation; Committee on Technical Barriers to Trade and Committee on Cooperation in the Field of Agriculture).

The institutional chapter of the EPA establishes a Joint Committee that has as its main task to supervise and facilitate the implementation and application of the Agreement. The Joint Committee is comprised of representatives of the EU and of Japan who will meet once a year or in urgent cases at the request of either side. The Joint Committee will be co-chaired by a representative of Japan at ministerial level and the relevant Member of the European Commission, or their respective delegates.

The EPA includes institutional provisions that lay down an implementing bodies’ structure to continuously monitor the implementation, operation and impact of the Agreement.

The EPA is not expected to have a financial impact on the EU budget on the side of the expenditures.

The EPA will have a financial impact on the EU budget on the side of the revenues. The EPA will lead to an estimated loss of duties of €970 million at the entry into force of the Agreement. After the EPA is fully implemented (after 15 years from its entry into force) the yearly loss of duties is estimated to reach €2.084 billion. This estimation is based on a projection of the evolution of trade for the next 15 years without any agreement.

The proposal does not affect the protection of fundamental rights within the Union.

The EPA is not subject to REFIT procedures. It nevertheless contains a number of provisions that will simplify trade and investment procedures, reduce export and investment related costs and will therefore enable more small firms to do business in both markets. Among the expected benefits are increased transparency, less burdensome technical rules, compliance requirements, customs procedures and rules of origin, enhanced protection of intellectual property rights and geographical indications, better access to procurement tender procedures, as well as a special chapter to enable SMEs to maximize the benefits from the EPA.

The long-term GDP increase for the EU is estimated to be +0.76% in the most appropriate scenario assuming full tariff liberalisation and symmetrical reduction of Non-Tariff Measures. It can be expected that bilateral exports increase by +34%, while total global exports increase is +4% for the EU.

The TSIA, conducted by an external contractor and finalised in April 2016, concluded that the EPA would deliver important positive impacts (in terms of GDP, income, trade and employment) for both the EU and Japan.

A Trade Sustainability Impact Assessment of the EPA was carried out by the London School of Economics Enterprise.

Also, prior and during negotiations, the EU Member States were regularly informed and consulted orally and in writing on the different aspects of the negotiations via the Council’s Trade Policy Committee. The European Parliament was also regularly informed and consulted via its Committee on International Trade (INTA), and notably its EU-Japan FTA Monitoring Group. The texts resulting from the negotiations were sent throughout the process to both institutions.

Both, the TSIA report and the consultations held in the context of its preparation, provided the Commission with inputs of great value.

In the framework of the TSIA, the contractor consulted internal and external experts, organised public consultations and held bilateral meetings and interviews with civil society. Consultations in the framework of the TSIA provided a platform for the involvement of key stakeholders and the civil society in a dialogue on trade policy.

Prior to the conclusion of the negotiations with Japan, a Trade Sustainability Impact Assessment (TSIA) of the EPA was conducted by an external contractor to study the potential economic, social and environmental impact of a closer economic partnership between the EU and Japan.

This proposal is submitted in accordance with Article 218 TFEU, which envisages the adoption by the Council of decisions concluding international agreement. There exists no other legal instrument that could be used in order to achieve the objective expressed in this proposal.

The proposal to conclude the EPA is in line with the vision of the Europe 2020 strategy and contributes to the EU's trade and development objectives. It does not exceed what is necessary to achieve those objectives.

The EPA, as presented to the Council, does not cover any matters that fall outside the scope of the EU’s exclusive competence.

In addition, Article 218(7) TFEU has been added as a legal basis as it appropriate for the Council to authorise the Commission to approve the position of the Union on certain modifications of the EPA given that the EPA provides for expedited or simplified procedures to approve such modifications. Therefore, the Commission should be authorised to adopt a decision to temporarily suspend, in accordance with paragraph 3 of Article 2.29 of the Agreement, the acceptance of self-certification of wine products, and the decision to terminate such temporary suspension in accordance with paragraph 4 of the same article. The Commission should also be authorised to approve the position of the Union on the modifications or rectifications of commitments under Part 2 of Annex 10 to the Agreement, as provided for in Article 10.14 (Modifications and rectifications to coverage), as well as on modifications of Annex 14-A (Laws and regulations of the Parties related to geographical indications) and Annex 14-B (List of geographical indications).

The EPA is to be signed by the European Union pursuant to a decision of the Council based on Article 218(5) TFEU and concluded by the European Union pursuant to a decision of the Council based on Article 218(6) TFEU, following the European Parliament’s consent.

In accordance with Opinion 2/15, all the matters covered by the EPA must also be held to fall within the competence of the European Union and, more particularly, within the scope of Articles 91, 100(2) and 207 TFEU.

In its Opinion 2/15 of 16 May 2017, the Court confirmed the EU’s exclusive competence with regard to all matters covered by the agreement that had been negotiated with Singapore, except for non-direct investment and investor-to-state dispute settlement where the Member States are defendants that the Court considered to be of shared competence of the European Union and the Member States. The Court drew the EU exclusive competence from the scope of the Common Commercial Policy under Article 207(1) TFEU and from Article 3(2) TFEU (based on the affectation of existing common rules contained in secondary legislation).

In July 2015, the Commission seized the Court of Justice of the EU for an opinion under Article 218(11) TFEU on whether the Union had the necessary competence to sign and conclude alone the Free Trade Agreement that had been negotiated with Singapore, or whether the participation of the EU Member States would be necessary, in respect of certain matters covered by that Agreement.

Furthermore, like all other free trade agreements the Commission has negotiated, the EU-Japan EPA fully safeguards public services and ensures that governments’ right to regulate in the public interest is fully preserved by the Agreement.

The EPA is fully consistent with European Union policies and will not require the EU to amend its rules, regulations or standards in any regulated area, e.g. technical rules and product standards, sanitary or phytosanitary rules, regulations on food and safety, health and safety standards, rules on GMO’s, environmental protection or consumer protection, with the exception of a derogation regarding the bottle size regulated in the Spirit Drinks Regulation to facilitate Japanese exports of traditional Shoshu, a spirit which Japan exports in traditional bottles of four go（合）or one sho（升).

The negotiation of the EPA was accompanied by the negotiation in parallel by the European External Action Service of the Strategic Partnership Agreement (the SPA) between the European Union and its Member States, on the one side, and Japan on the other. The negotiations for the SPA are now entering the final stage. The SPA, in combination with the EPA, are part of one negotiating context. Once in force, the SPA will provide the legal framework to further develop the already longstanding and strong partnership between the EU, its Member States and Japan in a broad range of areas, including political dialogue, energy, transport, human rights, education, science and technology, justice, asylum and migration. Moreover the SPA provides for the possibility of suspending its application in case of a violation of essential elements of the SPA, i.e. the human rights clause and the non-proliferation clause. In addition, the parties to the SPA note that in such case a party may take other appropriate measures outside the framework of the SPA in accordance with international law.

The attached proposal for a Council Decision constitutes the legal instrument authorising the conclusion of the EPA between the European Union and Japan.

In parallel to these proposals, the Commission will put forward a proposal for a horizontal safeguard regulation that will cover the EPA among other trade agreements.

-Proposal for a Council decision on the conclusion of the Economic Partnership Agreement between the European Union and Japan.

-Proposal for a Council decision on the signing on behalf of the European Union of the Economic Partnership Agreement between the European Union and Japan; and

The Commission is putting forward the following proposals for Council decisions:

The EPA does not include investment protection standards and investment protection dispute resolution because the still ongoing negotiations on those subject matters could not have been completed at the time of the conclusion of the EPA negotiations. The firm commitment on both sides is to complete the investment protection negotiations as soon as possible, in light of their shared commitment to a stable and secure investment environment in the Union and Japan. Investment protection, when agreed, will therefore form a separate bilateral investment agreement.

On the basis of the negotiating directives adopted by the Council in 2012 the Commission has negotiated with Japan an ambitious and comprehensive Economic Partnership Agreement with a view to creating new opportunities and legal certainty for trade and investment between both partners. The texts of the EPA after the finalisation of the negotiations were published in December 2017.

On 29 November 2012, the Council authorised the Commission to enter into negotiations for a Free Trade Agreement (FTA) with Japan. The Free Trade Agreement with Japan was renamed the "Economic Partnership Agreement" (the EPA) at the time of the conclusion of an agreement in principle on 6 July 2017.

Japan is the world’s third largest economy outside of the EU in terms of GDP, yet only EU's seventh largest trading partner. It has a population of over 127 million inhabitants with a very high purchasing power. It is a key market for European Union exporters, services providers and investors.

on the conclusion of the Economic Partnership Agreement between the European Union and Japan

EUROPEAN COMMISSION Brussels, 18.4.2018 COM(2018) 192 final ANNEX

to the Proposal for a Council Decision on the conclusion of the Economic Partnership Agreement between the European Union and Japan



AGREEMENT BETWEEN THE EUROPEAN UNION AND JAPAN FOR AN ECONOMIC PARTNERSHIP TABLE OF CONTENTS PREAMBLE CHAPTER 1 GENERAL PROVISIONS (Articles 1.1 to 1.9) CHAPTER 2 TRADE IN GOODS SECTION A General provisions (Articles 2.1 to 2.5) SECTION B National treatment and market access for goods (Articles 2.6 to 2.22) SECTION C Facilitation of wine product export (Articles 2.23 to 2.31) SECTION D Other provisions (Articles 2.32 to 2.35)

CHAPTER 3 RULES OF ORIGIN AND ORIGIN PROCEDURES SECTION A Rules of origin (Articles 3.1 to 3.15) SECTION B Origin procedures (Articles 3.16 to 3.26) SECTION C Miscellaneous (Articles 3.27 to 3.29)

CHAPTER 4 CUSTOMS MATTERS AND TRADE FACILITATION (Articles 4.1 to 4.14) CHAPTER 5 TRADE REMEDIES SECTION A General provisions (Article 5.1) SECTION B Bilateral safeguard measures (Articles 5.2 to 5.8) SECTION C Global safeguard measures (Articles 5.9 and 5.10) SECTION D Anti-dumping and countervailing measures (Articles 5.11 to 5.14)

CHAPTER 6 SANITARY AND PHYTOSANITARY MEASURES (Articles 6.1 to 6.16) CHAPTER 7 TECHNICAL BARRIERS TO TRADE (Articles 7.1 to 7.14) CHAPTER 8 TRADE IN SERVICES, INVESTMENT LIBERALISATION AND ELECTRONIC COMMERCE SECTION A General provisions (Articles 8.1 to 8.5) SECTION B Investment liberalisation (Articles 8.6 to 8.13)

SECTION C Cross-border trade in services (Articles 8.14 to 8.19) SECTION D Entry and temporary stay of natural persons (Articles 8.20 to 8.28) SECTION E Regulatory framework SUB-SECTION 1 Domestic regulation (Articles 8.29 to 8.32) SUB-SECTION 2 Provisions of general application (Articles 8.33 to 8.35)

SUB-SECTION 3 Postal and courier services (Articles 8.36 to 8.40) SUB-SECTION 4 Telecommunications services (Articles 8.41 to 8.57) SUB-SECTION 5 Financial services (Articles 8.58 to 8.67) SUB-SECTION 6 International maritime transport services (Articles 8.68 and 8.69) SECTION F Electronic commerce (Articles 8.70 to 8.81)

CHAPTER 9 CAPITAL MOVEMENTS, PAYMENTS AND TRANSFERS AND TEMPORARY SAFEGUARD MEASURES (Articles 9.1 to 9.4) CHAPTER 10 GOVERNMENT PROCUREMENT (Articles 10.1 to 10.17) CHAPTER 11 COMPETITION POLICY (Articles 11.1 to 11.9) CHAPTER 12 SUBSIDIES (Articles 12.1 to 12.10) CHPATER 13 STATE-OWNED ENTERPRISES, ENTERPRISES GRANTED SPECIAL RIGHTS OR PRIVILEGES AND DESIGNATED MONOPOLIES (Articles 13.1 to 13.8)

CHAPTER 14 INTELLECTUAL PROPERTY SECTION A General provisions (Articles 14.1 to 14.7) SECTION B Standards concerning intellectual property SUB-SECTION 1 Copyright and related rights (Articles 14.8 to 14.17) SUB-SECTION 2 Trademarks (Articles 14.18 to 14.21)

SUB-SECTION 3 Geographical indications (Articles 14.22 to 14.30) SUB-SECTION 4 Industrial designs (Article 14.31) SUB-SECTION 5 Unregistered appearance of products (Article 14.32) SUB-SECTION 6 Patents (Articles 14.33 to 14.35) SUB-SECTION 7 Trade secrets and undisclosed test or other data (Articles 14.36 and 14.37)

SUB-SECTION 8 New varieties of plants (Article 14.38) SUB-SECTION 9 Unfair competition (Article 14.39) SECTION C Enforcement SUB-SECTION 1 General provisions (Articles 14.40 and 14.41) SUB-SECTION 2 Enforcement – civil remedies (Articles 14.42 to 14.49)

SUB-SECTION 3 Enforcement of protection against misappropriation of trade secrets (Article 14.50) SUB-SECTION 4 Enforcement – border measures (Article 14.51) SECTION D Cooperation and institutional arrangements (Articles 14.52 to 14.55) CHAPTER 15 CORPORATE GOVERNANCE (Articles 15.1 to 15.7) CHAPTER 16 TRADE AND SUSTAINABLE DEVELOPMENT (Articles 16.1 to 16.19)

CHAPTER 17 TRANSPARENCY (Articles 17.1 to 17.8) CHAPTER 18 GOOD REGULATORY PRACTICES AND REGULATORY COOPERATION SECTION A Good regulatory practices and regulatory cooperation SUB-SECTION 1 General provisions (Articles 18.1 to 18.3) SUB-SECTION 2 Good regulatory practices (Articles 18.4 to 18.11) SUB-SECTION 3 Regulatory cooperation (Articles 18.12 and 18.13)

SUB-SECTION 4 Institutional provisions (Articles 18.14 to 18.16) SECTION B Animal welfare (Article 18.17) SECTION C Final provisions (Articles 18.18 and 18.19) CHAPTER 19 COOPERATION IN THE FIELD OF AGRICULTURE (Articles 19.1 to 19.8)

CHAPTER 20 SMALL AND MEDIUM-SIZED ENTERPRISES (Articles 20.1 to 20.4) CHAPTER 21 DISPUTE SETTLEMENT SECTION A Objective, scope and definitions (Articles 21.1 to 21.3) SECTION B Consultations and mediation (Articles 21.4 to 21.6) SECTION C Panel procedure (Articles 21.7 to 21.24) SECTION D General provisions (Articles 21.25 to 21.30) CHAPTER 22 INSTITUTIONAL PROVISIONS (Articles 22.1 to 22.6) CHAPTER 23 FINAL PROVISIONS (Articles 23.1 to 23.8)

ANNEXES (only the existing Annexes are listed): ANNEX 2-A TARIFF ELIMINATION AND REDUCTION

ANNEX 2-B LIST OF GOODS REFERRED TO IN ARTICLES 2.15 AND 2.17 ANNEX 2-C MOTOR VEHICLES AND PARTS Appendix 2-C-1 UN Regulations applied by both Parties Appendix 2-C-2 UN Regulations applied by one of the Parties and not yet considered by the other Party ANNEX 2-D FACILITATION OF SHOCHU EXPORT ANNEX 2-E FACILITATION OF WINE PRODUCT EXPORT ANNEX 3-A INTRODUCTORY NOTES TO PRODUCT SPECIFIC RULES OF ORIGIN ANNEX 3-B PRODUCT SPECIFIC RULES OF ORIGIN Appendix 3-B-1 Provisions related to certain vehicles and parts of vehicles

ANNEX 3-C INFORMATION REFERRED TO IN ARTICLE 3.5

ANNEX 3-D TEXT OF THE STATEMENT ON ORIGIN ANNEX 3-E ON THE PRINCIPALITY OF ANDORRA ANNEX 3-F ON THE REPUBLIC OF SAN MARINO ANNEX 6 FOOD ADDITIVES ANNEX 8-A REGULATORY COOPERATION ON FINANCIAL REGULATION ANNEX 8-B SCHEDULES FOR CHAPTER 8 ANNEX I RESERVATIONS FOR EXISTING MEASURES ANNEX II RESERVATIONS FOR FUTURE MEASURES

ANNEX III BUSINESS VISITORS FOR ESTABLISHMENT PURPOSES, INTRACORPORATE TRANSFEREES, INVESTORS AND SHORT-TERM BUSINESS VISITORS ANNEX IV CONTRACTUAL SERVICE SUPPLIERS AND INDEPENDENT PROFESSIONALS

Appendix IV Limitations of business activities of contractual service suppliers and independent professionals in Japan ANNEX 8-C UNDERSTANDING ON MOVEMENT OF NATURAL PERSONS FOR BUSINESS PURPOSES ANNEX 10 GOVERNMENT PROCUREMENT ANNEX 14-A LAWS AND REGULATIONS OF THE PARTIES RELATED TO GEOGRAPHICAL INDICATIONS ANNEX 14-B LIST OF GEOGRAPHICAL INDICATIONS ANNEX 23 JOINT DECLARATION

PREAMBLE THE EUROPEAN UNION and JAPAN (hereinafter referred to as "the Parties"), CONSCIOUS of their longstanding and strong partnership based on common principles and values, and of their important economic, trade and investment relationship; RECOGNISING the importance of strengthening their economic, trade and investment relations, in accordance with the objective of sustainable development in the economic, social and environmental dimensions, and of promoting trade and investment between them, mindful of the needs of the business communities of each Party, in particular small and medium-sized enterprises, and of high levels of environmental and labour protection through relevant internationally recognised standards and international agreements to which both Parties are party;

RECOGNISING that this Agreement contributes to enhancing consumer welfare through policies ensuring a high level of consumer protection and economic well-being; REALISING that a dynamic and rapidly changing global environment brought about by globalisation and closer integration among economies in the world presents many new economic challenges and opportunities to the Parties;

RECOGNISING that their economies are endowed with conditions to complement each other and that this complementarity should contribute to further promoting the development of trade and investment between the Parties by making use of their respective economic strengths through bilateral trade and investment activities; BELIEVING that creating a clearly established and secured trade and investment framework through mutually advantageous rules to govern trade and investment between the Parties would enhance the competitiveness of their economies, make their markets more efficient and vibrant and ensure predictable commercial environment for further expansion of trade and investment between them; REAFFIRMING their commitment to the Charter of the United Nations and having regard to the principles articulated in the Universal Declaration of Human Rights; RECOGNISING the importance of transparency in international trade and investment to the benefit of all stakeholders; SEEKING to establish clear and mutually advantageous rules governing trade and investment between the Parties and to reduce or eliminate barriers thereto;

RESOLVED to contribute to the harmonious development and expansion of international trade and investment by removing obstacles thereto through this Agreement and to avoid creating new barriers to trade or investment between the Parties that could reduce the benefits of this Agreement; BUILDING on their respective rights and obligations under the WTO Agreement and other multilateral, regional and bilateral agreements to which both Parties are party; and DETERMINED to establish a legal framework for strengthening their economic partnership,

HAVE AGREED AS FOLLOWS:

CHAPTER 1 GENERAL PROVISIONS ARTICLE 1.1 Objectives The objectives of this Agreement are to liberalise and facilitate trade and investment, as well as to promote a closer economic relationship between the Parties. ARTICLE 1.2 General definitions

For the purposes of this Agreement, unless otherwise specified: (a) "Agreement on Agriculture" means the Agreement on Agriculture in Annex 1A to the WTO Agreement;

(b) "Agreement on Anti-Dumping" means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement; (c) "Agreement on Import Licensing Procedures" means the Agreement on Import Licensing Procedures in Annex 1A to the WTO Agreement; (d) "Agreement on Safeguards" means the Agreement on Safeguards in Annex 1A to the WTO Agreement; (e) "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); (f) "customs authority" means: (i) for the European Union, the services of the European Commission responsible for customs matters and the customs administrations and any other authorities empowered in the Member States of the European Union to apply and enforce customs legislation; and (ii) for Japan, the Ministry of Finance;

(g) "customs legislation" means any laws and regulations of the European Union or Japan, governing the import, export and transit of goods and placing of goods under any other customs procedures, including measures of prohibitions, restrictions and controls falling under the competence of the customs authorities;

(h) "customs territory" means: (i) for the European Union, the customs territory as referred to in Article 4 of Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code; and (ii) for Japan, the territory with respect to which the customs legislation of Japan is in force; (i) "days" means calendar days; (j) "DSU" means the Understanding on Rules and Procedures Governing the Settlement of Disputes in Annex 2 to the WTO Agreement; (k) "GATS" means the General Agreement on Trade in Services in Annex 1B to the WTO Agreement;

(l) "GATT 1994" means the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement; for the purposes of this Agreement, references to articles in the GATT 1994 include the interpretative notes; (m) "GPA" means the Agreement on Government Procurement in Annex 4 to the WTO Agreement; (n) "Harmonized System" or "HS" means the Harmonized Commodity Description and Coding System, including its General Rules for the Interpretation, Section Notes, Chapter Notes and Subheading Notes; (o) "IMF" means the International Monetary Fund;

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

(q) "natural person of a Party" means, for the European Union, a national of a Member State of the European Union, and for Japan, a national of Japan, in accordance with their respective applicable laws and regulations; (r) "person" means a natural person or a legal person; (s) "SCM Agreement" means the Agreement on Subsidies and Countervailing Measures in Annex 1A to the WTO Agreement; (t) "SPS Agreement" means the Agreement on the Application of Sanitary and Phytosanitary Measures in Annex 1A to the WTO Agreement; (u) "TBT Agreement" means the Agreement on Technical Barriers to Trade in Annex 1A to the WTO Agreement; (v) "territory" means the area to which this Agreement applies in accordance with Article 1.3; (w) "TFEU" means the Treaty on the Functioning of the European Union;

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

(z) "WTO" means the World Trade Organization; and (aa) "WTO Agreement" means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994. ARTICLE 1.3 Territorial application 1. This Agreement applies: (a) for the European Union, to the territories in which the Treaty on European Union and the TFEU apply under the conditions laid down in those treaties; and (b) for Japan, to its territory.

2. Unless otherwise specified, this Agreement also applies to all the areas beyond each Party's territorial sea, including the sea-bed and subsoil thereof, over which that Party exercises sovereign rights or jurisdiction in accordance with international law including the United Nations Convention on the Law of the Sea, done at Montego Bay on 10 December 1982 and its laws and regulations which are consistent with international law. 3. As regards the provisions of this Agreement concerning the application of preferential tariff treatment to goods as well as Articles 2.9 and 2.10, this Agreement also applies to those areas of the customs territory of the European Union not covered by subparagraph 1(a) and to those areas provided for in Annexes 3-E and 3-F. 4. Each Party shall notify the other Party in the event that the respective scope of the territorial application of this Agreement as referred to in paragraphs 1 to 3 changes and promptly provide, on request of the other Party, supplementary information or clarification thereon.



ARTICLE 1.4 Taxation 1. For the purposes of this Article: (a) "residence" means residence for tax purposes; (b) "tax agreement" means an agreement for the avoidance of double taxation or any other international agreement or arrangement relating wholly or mainly to taxation to which the European Union or its Member States or Japan is party; and (c) "taxation measure" means a measure in application of the tax legislation of the European Union, of its Member States or of Japan. 2. This Agreement applies to taxation measures only in so far as such application is necessary to give effect to the provisions of this Agreement.

3. Nothing in this Agreement shall affect the rights and obligations of the European Union, of its Member States or of Japan under any tax agreement. In the event of any inconsistency between this Agreement and any such tax agreement, the tax agreement shall prevail to the extent of the inconsistency. With regard to a tax agreement between the European Union or its Member States and Japan, the relevant competent authorities under this Agreement and that tax agreement shall jointly determine whether an inconsistency exists between this Agreement and the tax agreement. 4. Any most-favoured-nation obligation in this Agreement shall not be applicable with respect to an advantage accorded by the European Union, by its Member States or by Japan pursuant to a tax agreement.

5. The Joint Committee established pursuant to Article 22.1 may decide on a different scope of the application of dispute settlement under Chapter 21 with respect to taxation measures.

6. Subject to the requirement that taxation measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between the Parties where like conditions prevail, or a disguised restriction on trade and investment, nothing in this Agreement shall be construed to prevent the adoption, maintenance or enforcement by the European Union, by its Member States or by Japan of any taxation measure aimed at ensuring the equitable or effective imposition or collection of taxes such as measures: (a) distinguishing between taxpayers who are not in the same situation, in particular with regard to their place of residence or the place where their capital is invested; or (b) preventing the avoidance or evasion of taxes pursuant to the provisions of any tax agreement or domestic tax legislation. ARTICLE 1.5 Security exceptions 1. Nothing in this Agreement shall be construed: (a) as requiring a Party to provide any information the disclosure of which it considers contrary to its essential security interests;

(b) as preventing a Party from taking any action which it considers necessary for the protection of its essential security interests: (i) relating to fissionable and fusionable materials or the materials from which they are derived;

(ii) relating to the production of or trade in arms, ammunition and implements of war as well as to the production of or trade in other goods and materials as carried out directly or indirectly for the purpose of supplying a military establishment; (iii) relating to the supply of services as carried out directly or indirectly for the purpose of provisioning a military establishment; or (iv) taken in time of war or other emergency in international relations; or (c) as preventing a Party from taking any action in pursuance of its obligations under the Charter of the United Nations for the purpose of maintaining international peace and security. 2. Notwithstanding paragraph 1, (a) for the purposes of Chapter 10, Article III of the GPA applies; and (b) for the purposes of Chapter 14, Article 14.54 applies.

ARTICLE 1.6 Confidential information

1. Unless otherwise provided for in this Agreement, nothing in this Agreement shall require a Party to provide confidential information the disclosure of which would impede the enforcement of its laws and regulations, or otherwise be contrary to the public interest, or which would prejudice legitimate commercial interests of particular enterprises, public or private. 2. When, under this Agreement, a Party provides the other Party with information which is considered as confidential under its laws and regulations, the other Party shall maintain the confidentiality of the information provided, unless the Party providing the information agrees otherwise. ARTICLE 1.7 Fulfilment of obligations and delegated authority 1. Each Party shall ensure that all necessary measures are taken in order to give effect to the provisions of this Agreement.

2. Unless otherwise specified in this Agreement, each Party shall ensure that any person or entity to which the Party has delegated regulatory or administrative authority to fulfil the Party's obligations under this Agreement acts in accordance with those obligations in the exercise of such delegated authority. 3. For greater certainty, neither Party shall be released from its obligations under this Agreement in the event of non-compliance with the provisions of this Agreement by any of its governmental levels or non-governmental bodies in the exercise of powers delegated by the Party to them. ARTICLE 1.8 Laws and regulations and their amendments

Where reference is made in this Agreement to laws and regulations of a Party, those laws and regulations shall be understood to include amendments thereto, unless otherwise specified. ARTICLE 1.9 Relation to other agreements 1. The existing agreements between the European Union or its Member States and Japan are not superseded or terminated by this Agreement.

2. Nothing in this Agreement shall require either Party to act in a manner inconsistent with its obligations under the WTO Agreement. 3. In the event of any inconsistency between this Agreement and any agreement other than the WTO Agreement to which both Parties are party, the Parties shall immediately consult with each other with a view to finding a mutually satisfactory solution. 4. Where international agreements are referred to in or incorporated into this Agreement, in whole or in part, they shall be understood to include amendments thereto or their successor agreements entering into force for both Parties on or after the date of signature of this Agreement. If any matter arises regarding the implementation or application of the provisions of this Agreement as a result of such amendments or successor agreements, the Parties may, on request of either Party, consult with each other with a view to finding a mutually satisfactory solution to this matter as necessary.

CHAPTER 2 TRADE IN GOODS

SECTION A General provisions ARTICLE 2.1 Objective The objective of this Chapter is to facilitate trade in goods between the Parties and to progressively liberalise trade in goods in accordance with the provisions of this Agreement. ARTICLE 2.2 Scope Unless otherwise provided for in this Agreement, this Chapter applies to trade in goods between the Parties.



ARTICLE 2.3 Definitions For the purposes of this Chapter: (a) "export licensing procedures" means administrative procedures, whether or not referred to as licensing, used by a Party for the operation of export licensing regimes requiring the submission of an application or other documentation, other than that required for customs procedures, to the relevant administrative body as a prior condition for exportation from that Party; (b) "non-automatic import or export licensing procedures" means licensing procedures where approval of the application is not granted for all persons who fulfil the requirements of the Party concerned for engaging in import or export operations involving the goods subject to those licensing procedures; and (c) "originating" means qualifying as originating in a Party under the provisions of Chapter 3.

ARTICLE 2.4 Customs duty Each Party shall reduce or eliminate customs duties pursuant to paragraph 1 of Article 2.8. For the purposes of this Chapter, "customs duties" means any duty or charge of any kind imposed on or in connection with the importation of a good, including any form of surtax or surcharge imposed on or in connection with such importation, but does not include any: (a) charge equivalent to an internal tax imposed in accordance with Article III of GATT 1994;

(b) duty applied in accordance with Articles VI and XIX of GATT 1994, the Agreement on Anti-Dumping, the SCM Agreement, the Agreement on Safeguards and Article 22 of the DSU; and (c) fees or other charges imposed in accordance with Article 2.16.

ARTICLE 2.5 Agricultural safeguards 1. Agricultural goods qualifying as originating goods of a Party (hereinafter referred to as "originating agricultural goods") shall not be subject to any duties applied by the other Party pursuant to a special safeguard measure taken under the Agreement on Agriculture. 2. Agricultural safeguard measures on the originating agricultural goods under this Agreement may be applied in accordance with Section C of Part 3 of Annex 2-A. SECTION B National treatment and market access for goods

ARTICLE 2.6 Classification of goods 1. The classification of goods in trade between the Parties shall be in conformity with the Harmonized System.

2. Each Party shall ensure consistency in applying its laws and regulations on tariff classification of originating goods of the other Party. ARTICLE 2.7 National treatment Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of GATT 1994. To that end, Article III of GATT 1994 is incorporated into and made part of this Agreement, mutatis mutandis. ARTICLE 2.8 Reduction and elimination of customs duties on imports

1. Unless otherwise provided for in this Agreement, each Party shall reduce or eliminate customs duties on originating goods of the other Party in accordance with Annex 2-A.

2. Where a Party reduces its most-favoured-nation applied rate of customs duty, that duty rate shall apply to an originating good of the other Party if, and for as long as, it is lower than the customs duty rate on the same good calculated in accordance with Annex 2-A. 3. The treatment of originating goods of a Party classified under the tariff lines indicated with "S" in the Column "Note" in the Schedule of the European Union in Section B of Part 2 of Annex 2-A and in the Schedule of Japan in Section D of Part 3 of Annex 2-A, shall be subject to review by the Parties in the fifth year following the date of entry into force of this Agreement or in a year on which the Parties otherwise agree, whichever comes first. The review shall proceed with a view to improving market access conditions through, for example, measures such as faster reduction or elimination of custom duties, streamlining of tendering processes and increasing of quota quantities, as well as addressing issues related to levies. 4. Where a Party grants a larger or faster tariff reduction, higher quota or any other more favourable treatment than that provided for under this Agreement to a third country based on an international agreement for goods covered by paragraph 3 which affects the balance in the European Union's or Japan's market of such goods, the Parties shall, with a view to ensuring that the other Party obtains at least the same preference, commence such a review within three months of the date of entry into force of the international agreement between the European Union and that third country or between Japan and that third country, and will conduct the review with the aim of concluding it within six months of the same date.

ARTICLE 2.9 Goods re-entered after repair and alteration 1. A Party shall not apply a customs duty to a good, regardless of its origin, that re-enters its customs territory after having been temporarily exported from its customs territory to the customs territory of the other Party for repair or alteration, regardless of whether that repair or alteration could have been performed in the customs territory of the former Party, provided that the good concerned re-enters the customs territory of that former Party within the period as specified in its laws and regulations. 2. Paragraph 1 does not apply to a good in the customs territory of a Party under customs control without payment of import duties and taxes that is exported for repair or alteration and that does not re-enter the customs territory under customs control without payment of import duties and taxes.

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 or alteration, provided that the good is re-exported from the customs territory of the importing Party within the period specified in its laws and regulations. 4. For the purposes of this Article, "repair" or "alteration" means any operation or process undertaken on a good to remedy operational defects or material damage and entailing the re–establishment of the good to its original function, or to ensure its compliance with technical requirements for its use. Repair or alteration of a good includes restoring and maintenance regardless of a possible increase in the value of the good, but does not include an operation or process that:

(a) destroys a good's essential characteristics or creates a new or commercially different good; (b) transforms an unfinished good into a finished good; or (c) changes the function of a good.

ARTICLE 2.10 Temporary admission of goods Each Party shall grant duty-free temporary admission into its customs territory for the following goods in accordance with its laws and regulations, provided that such goods do not undergo any change except normal depreciation due to the use made of them and that they are exported within the time period set by each Party: (a) goods for display or use at exhibitions, fairs, meetings or similar events; (b) professional equipment, including equipment for the press or for sound or television broadcasting, cinematographic equipment, ancillary apparatus for such equipment and accessories thereto; (c) commercial samples and advertising films and recordings;

(d) containers and pallets in use or to be used in the shipment of goods in international traffic, accessories and equipment therefor;

(e) welfare materials for seafarers; (f) goods imported exclusively for scientific purposes; (g) goods imported for international sports contests, demonstrations or training; (h) personal effects owned by temporarily visiting travellers; and (i) tourist publicity materials. ARTICLE 2.11 Customs valuation For the purpose of determining the customs value of goods traded between the Parties, the provisions of Part I of the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement shall apply, mutatis mutandis.



ARTICLE 2.12 Export duties A Party shall not adopt or maintain any duties, taxes, fees or other charges of any kind imposed on goods exported from that Party to the other Party, or any internal taxes or other charges on goods exported to the other Party that are in excess of those that would be imposed on like goods destined for domestic consumption. For the purpose of this Article, fees or other charges of any kind shall not include fees or other charges imposed in accordance with Article 2.16 that are limited to the amount of the approximate cost of service rendered. ARTICLE 2.13 Standstill 1. Unless otherwise provided for in this Agreement, a Party shall not increase any customs duty on originating goods of the other Party from the rate to be applied in accordance with Annex 2-A. 2. For greater certainty, a Party may raise a customs duty to the level set out in the Schedule of the European Union in Section B of Part 2 of Annex 2-A and in the Schedule of Japan in Section D of Part 3 of Annex 2-A for the respective year following a unilateral reduction of the customs duty.

ARTICLE 2.14 Export competition

1. For the purposes of this Article, "export subsidies" means subsidies referred to in subparagraph (e) of Article 1 of the Agreement on Agriculture and other subsidies listed in Annex I to the SCM Agreement that may be applied to agricultural goods which are listed in Annex 1 to the Agreement on Agriculture. 2. The Parties affirm their commitment, expressed in the Ministerial Decision of 19 December 2015 on Export Competition (WT/MIN(15)/45, WT/L/980) of the WTO, to exercise utmost restraint with regard to export subsidies and export measures with equivalent effect as set out in that decision. ARTICLE 2.15 Import and export restrictions 1. A Party shall not adopt or maintain any prohibition or restriction other than customs duties on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the customs territory of the other Party, except in accordance with Article XI of GATT 1994. To that end, Article XI of GATT 1994 is incorporated into and made part of this Agreement, mutatis mutandis.

2. If a Party intends to adopt a prohibition or restriction on the exportation or sale for export of any good listed in Annex 2-B in accordance with paragraph 2 of Article XI or with Article XX of GATT 1994, the Party shall: (a) seek to limit that prohibition or restriction to the extent necessary, giving due consideration to its possible negative effects on the other Party; (b) provide the other Party with written notice thereof, wherever possible prior to the introduction of such prohibition or restriction and as far in advance as practicable, or, if not, no later than 15 days after the date of introduction, whereby that written notice shall include a description of the good involved, the introduced prohibition or restriction, including its nature, its reasons, and the date of introduction of such prohibition or restriction as well as its expected duration; and (c) upon request, provide the other Party with a reasonable opportunity for consultation with respect to any matter related to such prohibition or restriction.



ARTICLE 2.16 Fees and formalities connected with importation and exportation 1. Each Party shall ensure, in accordance with Article VIII of GATT 1994, that all fees and charges of whatever character, other than customs duties, export duties and taxes in accordance with Article III of GATT 1994, imposed by that Party on or in connection with importation or exportation are limited to the amount of the approximate cost of services rendered, which shall not be calculated on an ad valorem basis, and shall not represent an indirect protection to domestic goods or a taxation of imports for fiscal purposes. 2. A Party shall not require consular transactions, including related fees and charges. For the purposes of this paragraph, "consular transactions" means requirements by the consul of the importing Party located in the exporting Party for the purpose of obtaining consular invoices or consular visas for commercial invoices, certificates of origin, manifests, shippers' export declarations, or any other customs documentation required on or in connection with importation.

ARTICLE 2.17 Import and export licensing procedures 1. The Parties affirm their existing rights and obligations under the Agreement on Import Licensing Procedures. 2. Each Party shall adopt or maintain export licensing procedures in accordance with paragraphs 1 to 9 of Article 1 and with Article 3 of the Agreement on Import Licensing Procedures. To that end, those provisions of the Agreement on Import Licensing Procedures are incorporated into and made part of this Agreement, mutatis mutandis, and shall apply to export licensing procedures between the Parties. A Party may adopt or maintain export licensing procedures in accordance with Article 2 of the Agreement on Import Licensing Procedures. Paragraphs 2 to 8 apply to any good listed in Annex 2-B. 3. Each Party shall ensure that all export licensing procedures are neutral in application and administered in a fair, equitable, non-discriminatory and transparent manner. 4. Each Party shall adopt or maintain import or export licensing procedures only when other appropriate procedures to achieve an administrative purpose are not reasonably available.



5. A Party shall not adopt or maintain non-automatic import or export licensing procedures unless necessary to implement a measure that is consistent with this Agreement. A Party adopting non-automatic licensing procedures shall clearly indicate the measure being implemented through such licensing procedure. 6. Each Party shall respond, within 60 days, to any enquiry from the other Party regarding import or export licensing procedures which the former Party intends to adopt, has adopted or maintains, as well as the criteria for granting or allocating import or export licenses. 7. In applying export restrictions to a good in the form of a quota, a Party shall aim at a distribution of trade in that good approaching as closely as possible the shares which would be expected in the absence of that restriction. 8. If a Party adopts or maintains export licensing procedures, the Parties shall hold consultations, on request of the other Party, on any issues related to the implementation of those procedures, and give due consideration to the results of those consultations.

ARTICLE 2.18 Remanufactured goods 1. Unless otherwise provided for in this Agreement, each Party shall provide that remanufactured goods are treated as new goods. Each Party may require that remanufactured goods be identified as such for distribution or sale. 2. For the purposes of this Article, "remanufactured goods" means goods classified under heading 40.12, Chapters 84 to 90 or heading 94.02 of the Harmonized System that: (a) are entirely or partially composed of parts obtained from used goods;

(b) have a similar life expectancy and performance compared to such goods, when new; and (c) have a factory warranty similar to that applicable to such goods, when new.

ARTICLE 2.19 Non-tariff measures 1. Specific commitments relating to non-tariff measures on goods by each Party are set out in Annexes 2-C and 2-D. 2. After 10 years from the date of entry into force of this Agreement, or on request of a Party, the Parties shall evaluate whether issues resulting from non-tariff measures on goods can be addressed effectively within the framework of this Agreement. As a result of this evaluation, the Parties shall enter into consultations to consider broadening the scope of existing commitments or undertaking additional commitments of mutual interest on non-tariff measures on goods, including on cooperation. On the basis of those consultations, the Parties may agree to enter into negotiations of mutual interest. In implementing this paragraph, the Parties shall take into account the experience gained during the preceding period of implementation of this Agreement.

ARTICLE 2.20 Restrictions to safeguard the balance of payments 1. Nothing in this Agreement shall be construed as preventing a Party from taking any measures for balance-of-payments purposes. A Party taking such measures shall do so in accordance with the conditions established in Article XII of GATT 1994 and the Understanding on the Balance-of-Payments Provisions of the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement.

2. Nothing in this Agreement shall preclude the use by a Party of exchange controls or exchange restrictions in accordance with the Articles of Agreement of the International Monetary Fund. ARTICLE 2.21 Origin marking Unless otherwise provided for in this Agreement, where a Party applies obligatory country of origin marking requirements to goods other than food, agricultural or fishery goods as defined in the laws and regulations of that Party, the marking "Made in Japan" or a similar marking in the local language of the importing country, for the European Union, and the marking "Made in EU" or a similar marking in Japanese, for Japan, shall be accepted as fulfilling those requirements. Chapter 3 does not apply to this Article.

ARTICLE 2.22 General exceptions 1. For the purposes of this Chapter, Article XX of GATT 1994 is hereby incorporated into and made part of this Agreement, mutatis mutandis. 2. If a Party intends to take any measures in accordance with subparagraphs (i) and (j) of Article XX of GATT 1994, the Party shall: (a) provide the other Party with all relevant information; and

(b) upon request, provide the other Party with a reasonable opportunity for consultation with respect to any matter related to such measure, with a view to seeking a mutually acceptable solution. 3. The Parties may agree on any means needed to put an end to the matters subject to consultation referred to in subparagraph 2(b).

4. If exceptional and critical circumstances requiring immediate action make prior provision of information or examination impossible, the Party intending to take the measures concerned may apply immediately the measures necessary to deal with the circumstances and shall immediately inform the other Party thereof. SECTION C Facilitation of wine product export ARTICLE 2.23 Scope The provisions of this Section do not apply to any goods other than wine products classified under the heading 22.04 of the Harmonized System. ARTICLE 2.24

General principle Unless otherwise provided for in Articles 2.25 to 2.28, the importation and sale of wine products traded between the Parties covered by this Section shall be conducted in compliance with the laws and regulations of the importing Party.

ARTICLE 2.25 Authorisation of oenological practices – phase one 1. From the date of entry into force of this Agreement, the European Union shall authorise the importation and sale of wine products for human consumption in the European Union originating in Japan and produced in accordance with: (a) product definitions and oenological practices authorised and restrictions applied in Japan for the sale of Japan wine as referred to in Section A of Part 2 of Annex 2-E provided that they comply with product definitions and oenological practices and restrictions as referred to in Section A of Part 1 of Annex 2-E; and (b) the oenological practices as referred to in Section B of Part 2 of Annex 2-E. 2. From the date of entry into force of this Agreement, Japan shall authorise the importation and sale of wine products for human consumption in Japan originating in the European Union and produced in accordance with: (a) product definitions and oenological practices authorised and restrictions applied in the European Union as referred to in Section A of Part 1 of Annex 2-E provided that they comply with product definitions and oenological practices and restrictions as referred to in Section A of Part 2 of Annex 2-E; and

(b) the oenological practices as referred to in Section B of Part 1 of Annex 2-E.

3. On the date of entry into force of this Agreement, the Parties shall exchange notifications confirming that their procedures for the authorisation of oenological practices referred to in Section B of Part 1 and Section B of Part 2 of Annex 2-E, respectively, have been completed. ARTICLE 2.26 Authorisation of oenological practices - phase two 1. The European Union shall expeditiously take necessary steps with a view to authorising the oenological practices as referred to in Section C of Part 2 of Annex 2-E and notify Japan that its procedures for that authorisation have been completed. 2. Japan shall expeditiously take necessary steps with a view to authorising the oenological practices as referred to in Section C of Part 1 of Annex 2-E and notify the European Union that its procedures for that authorisation have been completed. 3. The authorisation referred to in paragraphs 1 and 2 shall enter into force on the date of the latter notification by either Party.

ARTICLE 2.27 Authorisation of oenological practices – phase three 1. The European Union shall take necessary steps with a view to authorising the oenological practices as referred to in Section D of Part 2 of Annex 2-E and notify Japan that its procedures for that authorisation have been completed.

2. Japan shall take necessary steps with a view to authorising the oenological practices as referred to in Section D of Part 1 of Annex 2-E and notify the European Union that its procedures for that authorisation have been completed. 3. The authorisation referred to in paragraphs 1 and 2 shall enter into force on the date of the latter notification by either Party. ARTICLE 2.28 Self-certification 1. A certificate authenticated in conformity with the laws and regulations of Japan, including a self-certificate established by a producer authorised by the competent authority of Japan, shall suffice as documentation serving as evidence that the requirements for the importation and sale in the European Union of wine products originating in Japan referred to in Article 2.25, 2.26 or 2.27 have been fulfilled.

2. The Working Group on Wine established pursuant to Article 22.4 shall adopt, upon the entry into force of this Agreement, by decision, the modalities: (a) for the implementation of paragraph 1, in particular the forms to be used and the information to be provided on the certificate; and (b) for the cooperation between the contact points designated by the European Union for each of its Member States and by Japan. 3. No certificate or other equivalent documentation is required as evidence that the requirements for the importation and sale in Japan of wine products originating in the European Union referred to in Article 2.25, 2.26 or 2.27 have been fulfilled.

ARTICLE 2.29 Review, consultations and temporary suspension of self-certification 1. The Parties shall review the implementation of: (a) Article 2.26 regularly and at least once a year during the two years after the date of entry into force of this Agreement; and

(b) Article 2.27 no later than three years after the date of entry into force of this Agreement. 2. If the Parties find, in the process of review of the implementation of Article 2.26, that the notifications provided for in Article 2.26 have not been exchanged within two years of the date of entry into force of this Agreement, the Parties shall enter into consultations with a view to agreeing on a practical solution. 3. Where the notification referred to in paragraph 2 of Article 2.26 has not been sent within two years of the date of entry into force of this Agreement and the notification referred to in paragraph 1 of Article 2.26 has been sent, the European Union may temporarily suspend the acceptance of self-certification of wine products provided for in Article 2.28, if a practical solution as referred to in paragraph 2 is not agreed upon within three months of the initiation of the consultations referred to in paragraph 2. 4. The temporary suspension of the acceptance of the self-certification referred to in paragraph 3 shall be immediately terminated when Japan sends the notification provided for in paragraph 2 of Article 2.26 to the European Union. 5. If the Parties find, in the process of review on the implementation of Article 2.27 referred to in paragraph 1, that the notifications provided for in Article 2.27 have not been exchanged within five years of the date of entry into force of this Agreement, the Parties shall enter into consultations.

6. Nothing in this Article shall affect the rights and obligations of a Party under the SPS Agreement.

ARTICLE 2.30 Standstill 1. For matters covered by Articles 2.25 to 2.28, a Party shall not impose less favourable conditions than those provided for in this Section or in its laws and regulations in force on the date of signature of this Agreement. 2. Paragraph 1 shall be without prejudice to the right of the Parties to take sanitary and phytosanitary measures necessary for the protection of human, animal or plant life or health, provided that such measures are not inconsistent with the provisions of the SPS Agreement. ARTICLE 2.31 Amendments The Joint Committee established pursuant to Article 22.1 may adopt decisions amending Annex 2-E, to add, delete or modify references to oenological practices, restrictions and other elements, in accordance with paragraph 3 of Article 23.2.

SECTION D

Other provisions ARTICLE 2.32 Exchange of information 1. For the purpose of monitoring the functioning of this Agreement and for the period of 10 years after the entry into force of this Agreement, the Parties shall annually exchange import statistics for the period covering the most recent calendar year available. The period may be extended by the Committee on Trade in Goods established pursuant to Article 22.3 for another five years. 2. The exchange of import statistics referred to in paragraph 1 shall cover, to the extent possible, data pertaining to the period covering the most recent calendar year available, including value and volume, based on the nomenclature of the Party, of imports of goods of the other Party benefitting from preferential tariff treatment under this Agreement and those that do not receive preferential tariff treatment.

ARTICLE 2.33 Special measures concerning the management of preferential tariff treatment 1. The Parties recognise that breaches of their customs legislation relating to the preferential tariff treatment under this Agreement could adversely affect the domestic industry and agree to cooperate on preventing, detecting and combating such breaches in accordance with the relevant provisions of Chapter 3 and the Agreement between the European Community and the Government of Japan on Co-operation and Mutual Administrative Assistance in Customs Matters, done at Brussels on 30 January 2008 (hereinafter referred to as "CMAA"). 2. A Party may, in accordance with the procedure laid down in paragraphs 4 to 7, temporarily suspend the preferential tariff treatment under this Agreement for the goods concerned which are related to the systematic breaches referred to in subparagraph (a), if the Party has made a finding, on the basis of objective, compelling and verifiable information, that:

(a) systematic breaches in its customs legislation related to the preferential tariff treatment under this Agreement for a certain good have been committed; and (b) the other Party has systematically and unjustifiably refused or has otherwise failed to conduct the cooperation referred to in paragraph 1 in relation to the systematic breaches referred to in subparagraph (a).

3. Notwithstanding paragraph 2, the temporary suspension shall not be applied to traders who fulfil the compliance criteria agreed by the Parties through the consultations referred to in paragraph 4. 4. The Party which has made the finding referred to in paragraph 2 shall, without undue delay, notify the other Party of that finding with sufficient information to justify the initiation of consultations, including the summary of essential facts related to subparagraphs 2(a) and (b) and enter into consultations with the other Party in the Committee on Trade in Goods with a view to reaching a solution acceptable to both Parties and agreeing on the compliance criteria with regard to the requirements of this Agreement and the relevant customs legislation. 5. The Party which has made the finding referred to in paragraph 2 shall, before a final decision is made, inform all interested parties of its intention to apply a temporary suspension, and shall ensure that they have a full opportunity for defending their interests. A temporary suspension shall not be applied to interested parties, provided that they objectively and satisfactorily demonstrate to the Party which has made the finding that they are not involved in the systematic breaches referred to in subparagraph 2(a).

6. Following the processes referred to in paragraphs 4 and 5, if the Parties have failed to agree on an acceptable solution within six months of the notification, the Party which has made the finding may decide to suspend temporarily the preferential tariff treatment under this Agreement for the goods concerned, duly taking into account the exception provided for in paragraph 3. A temporary suspension shall be notified to the other Party without undue delay. 7. A temporary suspension shall be applied only for the period necessary to counteract the breaches and no longer than six months. If a Party has made a finding that the conditions that gave rise to the initial suspension persist at the expiry of the temporary suspension, that Party may decide to renew the temporary suspension, after notifying the other Party of such a finding with sufficient information to justify the renewal. Any temporary suspension shall be terminated on a date no later than two years from the initial suspension unless it has been demonstrated to the Committee on Trade in Goods that the conditions that gave rise to the initial suspension still persist at the expiry of the period of each renewal. 8. The applied temporary suspensions shall be subject to periodic consultations in the Committee on Trade in Goods. 9. The Party which has made the finding referred to in paragraph 2 or 7 shall publish, in accordance with its internal procedures, notices to importers about any notification and decision concerning temporary suspensions referred to in paragraphs 4 to 7.

10. A temporary suspension shall not apply to traders other than the traders referred to in paragraph 3 and the interested parties referred to in paragraph 5, provided that they objectively and satisfactorily demonstrate to the Party which has made the finding referred to in paragraph 2 or 7 that they are not involved in the systematic breaches referred to in subparagraph 2(a).

11. For greater certainty, nothing in this Article shall be construed as preventing traders or interested parties from claiming compensation for damage illegally incurred by the measures referred to in paragraph 6, against the Party which has made the finding referred to in paragraph 2 or 7, in accordance with its laws and regulations. ARTICLE 2.34 Committee on Trade in Goods 1. The Committee on Trade in Goods established pursuant to Article 22.3 (hereinafter referred to in this Article as "the Committee") shall be responsible for the effective implementation and operation of this Chapter. 2. The Committee shall have the following functions: (a) reviewing and monitoring the implementation and operation of this Chapter;

(b) reporting the findings of the Committee to the Joint Committee; and (c) carrying out other functions as may be delegated by the Joint Committee pursuant to subparagraph 5(b) of Article 22.1. 3. The Committee shall hold meetings at such times and venues or by means, as may be agreed by the representatives of the Parties.

ARTICLE 2.35 Working Group on Wine 1. The Working Group on Wine established pursuant to paragraph 1 of Article 22.4 shall be responsible for the effective implementation and operation of Section C and Annex 2-E. 2. The Working Group on Wine shall have the following functions: (a) adopting the modalities concerning the self-certification referred to in paragraph 2 of Article 2.28;

(b) monitoring the implementation of Articles 2.25 to 2.29, including the review and consultations under Article 2.29; and (c) considering amendments of Annex 2-E and making recommendations to the Joint Committee regarding the adoption of a decision with respect to those amendments. 3. The Working Group on Wine shall hold its first meeting on the date of entry into force of this Agreement.

CHAPTER 3 RULES OF ORIGIN AND ORIGIN PROCEDURES

SECTION A Rules of origin ARTICLE 3.1 Definitions For the purposes of this Chapter: (a) "aquaculture" means the farming of aquatic organisms, including fish, molluscs, crustaceans, other aquatic invertebrates and aquatic plants from seed stock such as eggs, fry, fingerlings, larvae, parr, smolts or other immature fish at a post-larval stage by intervention in the rearing or growth processes to enhance production such as regular stocking, feeding or protection from predators;

(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) "exporter" means a person, located in a Party, who, in accordance with the requirements laid down in the laws and regulations of that Party, exports or produces the originating product and makes out a statement on origin; (d) "importer" means a person who imports the originating product and claims preferential tariff treatment for it;

(e) "material" means any matter or substance used in the production of a product, including any components, ingredients, raw materials or parts; (f) "non-originating material" means a material which does not qualify as originating under this Chapter, including a material whose originating status cannot be determined; (g) "preferential tariff treatment" means the rate of customs duties applicable to an originating good in accordance with paragraph 1 of Article 2.8;

(h) "product" means any matter or substance resulting from production, even if it is intended for use as a material in the production of another product, and shall be understood as a good referred to in Chapter 2; and (i) "production" means any kind of working or processing including assembly. ARTICLE 3.2 Requirements for originating products 1. For the purpose of the application of preferential tariff treatment by a Party to an originating good of the other Party in accordance with paragraph 1 of Article 2.8, the following products, if they satisfy all other applicable requirements of this Chapter, shall be considered as originating in the other Party: (a) wholly obtained or produced products as provided for in Article 3.3; (b) products produced exclusively from materials originating in that Party; or

(c) products produced using non-originating materials provided they satisfy all applicable requirements of Annex 3-B.

2. For the purposes of this Chapter, the territorial scope of a Party does not include the sea, seabed and subsoil beyond its territorial sea. 3. If a product has acquired originating status, the non-originating materials used in the production of the product shall not be considered non-originating when that product is incorporated as material into another product. 4. The requirements set out in this Chapter relating to the acquisition of originating status shall be satisfied without interruption in a Party. ARTICLE 3.3 Wholly obtained products 1. For the purposes of Article 3.2, a product is wholly obtained in a Party if it is: (a) a plant or plant product, grown, cultivated, harvested, picked or gathered there; (b) a live animal born and raised there;

(c) a product obtained from a live animal raised there;

(d) a product obtained from a slaughtered animal born and raised there; (e) an animal obtained by hunting, trapping, fishing, gathering or capturing there; (f) a product obtained from aquaculture there; (g) a mineral or other naturally occurring substance, not included in subparagraphs (a) to (f), extracted or taken there; (h) fish, shellfish or other marine life taken by a Party's vessel from the sea, seabed or subsoil beyond the territorial sea of each Party and, in accordance with international law, beyond the territorial sea of third countries; (i) a product produced exclusively from products referred to in subparagraph (h) on board a Party's factory ship beyond the territorial sea of each Party and, in accordance with international law, beyond the territorial sea of third countries; (j) a product other than fish, shellfish and other marine life taken by a Party or a person of a Party from the seabed or subsoil beyond the territorial sea of each Party, and beyond areas over which third countries exercise jurisdiction provided that that Party or a person of that Party has the right to exploit that seabed or subsoil in accordance with international law;

(k) a product that is: (i) waste or scrap derived from production there; or

(ii) waste or scrap derived from used products collected there, provided that those products are fit only for the recovery of raw materials; or (l) a product produced there, exclusively from products referred to in subparagraphs (a) to (k) or from their derivatives. 2. "A Party's vessel" in subparagraph 1(h) or "a Party's factory ship" in subparagraph 1(i) means respectively a vessel or a factory ship which: (a) is registered in a Member State of the European Union or in Japan; (b) flies the flag of a Member State of the European Union or of Japan; and (c) satisfies one of the following requirements: (i) it is at least 50 per cent owned by one or more natural persons of a Party; or

(ii) it is owned by one or more juridical persons: (A) which have their head office and their main place of business in a Party; and (B) in which at least 50 per cent of the ownership belongs to natural persons or juridical persons of a Party.

ARTICLE 3.4 Insufficient working or processing 1. Notwithstanding subparagraph 1(c) of Article 3.2, 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 the production of the product in that Party: (a) preserving operations such as drying, freezing, keeping in brine and other similar operations where their sole purpose is to ensure that the product remains in good condition during transport and storage;

(b) changes of packaging; (c) breaking-up or assembly of packages; (d) washing, cleaning or removal of dust, oxide, oil, paint or other coverings; (e) ironing or pressing of textiles and textile articles; (f) simple painting or polishing operations; (g) husking, partial or total bleaching, polishing or glazing of cereals and rice;

(h) operations to colour or flavour sugar or form sugar lumps; partial or total milling of sugar in solid form; (i) peeling, stoning or shelling of fruits, nuts or vegetables; (j) sharpening, simple grinding or simple cutting; (k) sifting, screening, sorting, classifying, grading or matching including the making-up of sets of articles;

(l) simple placing in bottles, cans, flasks, bags, cases or boxes, simple fixing on cards or boards and all other simple packaging operations; (m) affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging; (n) simple mixing of products, whether or not of different kinds; (o) simple addition of water, dilution, dehydration or denaturation of products; (p) simple collection or assembly of parts to constitute a complete or finished article, or an article falling to be classified as complete or finished pursuant to Rule 2(a) of the General Rules for the Interpretation of the Harmonized System; disassembly of products in parts; or (q) slaughter of animals.



2. For the purpose of paragraph 1, operations shall be considered simple if neither special skills nor machines, apparatus or equipment especially produced or installed are needed for carrying out those operations. ARTICLE 3.5 Accumulation 1. A product that qualifies as 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 the other Party. 2. Production carried out in a Party on a non-originating material may be taken into account for the purpose of determining whether a product is originating in the other Party. 3. Paragraphs 1 and 2 do not apply if the production carried out in the other Party does not go beyond one or more of the operations referred to in subparagraphs 1(a) to (q) of Article 3.4. 4. In order for an exporter to complete the statement on origin referred to in subparagraph 2(a) of Article 3.16 for a product referred to in paragraph 2, the exporter shall obtain from its supplier information as provided for in Annex 3-C.

5. The information referred to in paragraph 4 shall apply to a single consignment or multiple consignments for the same material that is supplied within a period that does not exceed 12 months from the date on which the information was provided. ARTICLE 3.6

Tolerances 1. If a non-originating material used in the production of a product does not satisfy the requirements set out in Annex 3-B, the product shall be considered as originating in a Party, provided that: (a) for a product classified under Chapters 1 to 49 or Chapters 64 to 97 of the Harmonized System, the value of all those non-originating materials does not exceed 10 per cent of the ex-works or free on board price of the product; (b) for a product classified under Chapters 50 to 63 of the Harmonized System, tolerances apply as stipulated in Notes 6 to 8 of Annex 3-A.

2. Paragraph 1 does not apply if the value of non-originating materials used in the production of a product exceeds any of the percentages for the maximum value of non-originating materials as specified in the requirements set out in Annex 3-B. 3. Paragraph 1 does not apply to products wholly obtained in a Party within the meaning of Article 3.3. If Annex 3-B requires that the materials used in the production of a product are wholly obtained, paragraphs 1 and 2 apply. ARTICLE 3.7 Unit of qualification 1. The unit of qualification for the application of the provisions of this Chapter shall be the particular product which is considered as the basic unit when classifying the product under the Harmonized System.

2. When 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 the provisions of this Chapter.

ARTICLE 3.8 Accounting segregation 1. Originating and non-originating fungible materials shall be physically segregated during storage in order to maintain their originating status. 2. For the purpose of this Article, "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. 3. Notwithstanding paragraph 1, originating and non-originating fungible materials may be used in the production of a product without being physically segregated during storage provided that an accounting segregation method is used. 4. The accounting segregation method referred to in paragraph 3 shall be applied in conformity with an inventory management method under accounting principles which are generally accepted in the Party.

5. A Party may require, under conditions set out in its laws and regulations, that the use of an accounting segregation method is subject to prior authorisation by the customs authority of that Party. The customs authority of the Party shall monitor the use of the authorisation and may withdraw the authorisation if the holder makes improper use of the accounting segregation method or fails to fulfil any of the other conditions laid down in this Chapter. 6. The accounting segregation method shall be any method that ensures that at any time no more materials receive originating status than would be the case if the materials had been physically segregated.

ARTICLE 3.9 Sets A set, classified pursuant to Rules 3(b) and (c) of the General Rules for the Interpretation of the Harmonized System, shall be considered as originating in a Party when all of its components are originating under this Chapter. Where the set is composed of originating and non-originating components, it shall as a whole be considered as originating in a Party, provided that the value of the non-originating components does not exceed 15 per cent of the ex-works or free on board price of the set.

ARTICLE 3.10 Non-alteration 1. An originating product declared for home use in the importing Party shall not have, after exportation and prior to being declared for home use, been altered, transformed in any way or subjected to operations other than to preserve them 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 that it remains under customs supervision in that third country. 3. Without prejudice to Section B, the splitting of consignments may take place in a third country if it is carried out by the exporter or under its responsibility and provided that they remain under customs supervision in that third country. 4. In case of doubt as to whether the requirements 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, which 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 3.11 Returning products If an originating product of a Party exported from that Party to a third country 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 that third country or while being exported. ARTICLE 3.12 Accessories, spare parts, tools and instructional or other information materials 1. For the purposes of this Article, accessories, spare parts, tool and instructional or other information materials are covered if: (a) the accessories, spare parts, tools and instructional or other information materials are classified and delivered with, but not invoiced separately from, the product; and



(b) the types, quantities and value of the accessories, spare parts, tools and instructional or other information materials are customary for that product. 2. In determining whether a product is wholly obtained, or satisfies a production process or change in tariff classification requirement as set out in Annex 3-B, accessories, spare parts, tools and instructional or other information materials shall be disregarded. 3. In determining whether a product meets a value requirement set out in Annex 3-B, the value of accessories, spare parts, tools and instructional or other information materials shall be taken into account as originating or non-originating materials, as the case may be, in the calculation for the purpose of the application of the value requirement to the product. 4. A product's accessories, spare parts, tools and instructional or other information materials shall have the originating status of the product with which they are delivered.

ARTICLE 3.13 Neutral elements In order to determine whether a product is originating in a Party, it shall not be necessary to determine the originating status of the following elements: (a) fuel, energy, catalysts and solvents; (b) equipment, devices and supplies used to test or inspect the product; (c) gloves, glasses, footwear, clothing, safety equipment and supplies;

(d) machines, tools, dies and moulds; (e) spare parts and materials used in the maintenance of equipment and buildings; (f) lubricants, greases, compounding materials and other materials used in production or used to operate equipment and buildings; and (g) any other material that is not incorporated into the product but the use of which in the production of the product can reasonably be demonstrated to be a part of that production.

ARTICLE 3.14 Packing materials and containers for shipment Packing materials and containers for shipment that are used to protect a product during transportation shall be disregarded in determining the originating status of a product. ARTICLE 3.15 Packaging materials and containers for retail sale

1. Packaging materials and containers in which a product is packaged for retail sale, if classified with the product, shall be disregarded in determining whether all the non-originating materials used in the production of the product have undergone the applicable change in tariff classification or a production process set out in Annex 3-B or whether the product is wholly obtained. 2. If a product is subject to a value requirement set out in Annex 3-B, the value of the packaging materials and containers in which the product is packaged for retail sale, if classified with the product, shall be taken into account as originating or non-originating, as the case may be, in the calculation for the purpose of application of the value requirement to the product.

SECTION B Origin procedures ARTICLE 3.16 Claim for preferential tariff treatment 1. The importing Party shall, on importation, grant preferential tariff treatment to a product originating in the other Party on the basis of a claim by the importer for preferential tariff treatment. The importer shall be responsible for the correctness of the claim for preferential tariff treatment and compliance with the requirements provided for in this Chapter. 2. A claim for preferential tariff treatment shall be based on: (a) a statement on origin that the product is originating made out by the exporter; or

(b) the importer's knowledge that the product is originating.

3. A claim for preferential tariff treatment and its basis as referred to in subparagraph 2(a) or (b) shall be included in the customs import declaration in accordance with the laws and regulations of the importing Party. The customs authority of the importing Party may request, to the extent that the importer can provide such explanation, the importer to provide an explanation, as part of the customs import declaration or accompanying it, that the product satisfies the requirements of this Chapter. 4 The importer making a claim for preferential tariff treatment based on a statement on origin referred to in subparagraph 2(a) shall keep the statement on origin and, when required by the customs authority of the importing Party, provide a copy thereof to that authority. 5. Paragraphs 2 to 4 do not apply in the cases specified in Article 3.20.

ARTICLE 3.17 Statement on origin 1. A statement on origin may be made out by an exporter of a product on the basis of information demonstrating that the product is originating, including information on the originating status of materials used in the production of the product. The exporter is responsible for the correctness of the statement on origin and of the information provided. 2. A statement on origin shall be made out using one of the linguistic versions of the text set out in Annex 3-D on an invoice or on any other commercial document that describes the originating product in sufficient detail to enable its identification. The importing Party shall not require the importer to submit a translation of the statement on origin. 3. The customs authority of the importing Party shall not reject a claim for preferential tariff treatment due to minor errors or discrepancies in the statement on origin or for the sole reason that an invoice was issued in a third country.

4. A statement on origin shall be valid for 12 months from the date it was made out.

5. A statement on origin may apply to: (a) a single shipment of one or more products imported into a Party; or (b) multiple shipments of identical products imported into a Party within any period specified in the statement on origin not exceeding 12 months. 6. If, on request of the importer, unassembled or disassembled products within the meaning of Rule 2(a) of the General Rules for the Interpretation of the Harmonized System falling within Sections XV to XXI of the Harmonized System are imported by instalments, a single statement on origin for such products may be used in accordance with the requirements laid down by the customs authority of the importing Party. ARTICLE 3.18 Importer's knowledge The importer's knowledge that a product is originating in the exporting Party shall be based on information demonstrating that the product is originating and satisfies the requirements provided for in this Chapter.

ARTICLE 3.19

Record keeping requirements 1. An importer making a claim for preferential tariff treatment for a product imported into the importing Party shall, for a minimum of three years after the date of importation of the product, keep: (a) if the claim was based on a statement on origin, the statement on origin made out by the exporter; or (b) if the claim was based on the importer's knowledge, all records demonstrating that the product satisfies the requirements to obtain originating status. 2. An exporter who has made out a statement on origin shall, for a minimum of four years after the making out of that statement on origin, keep a copy of the statement on origin and all other records demonstrating that the product satisfies the requirements to obtain originating status. 3. The records to be kept in accordance with this Article may be held in electronic format. 4. Paragraphs 1 to 3 do not apply in the cases specified in Article 3.20.

ARTICLE 3.20 Small consignments and waivers 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 provided that such products are not imported by way of trade, have been declared as satisfying the requirements of this Chapter and if there is no doubt as to the veracity of such a declaration.

2. Provided that the importation does not form part of importations that may reasonably be considered to have been made separately for the purpose of avoiding the requirement for a statement on origin, the total value of the products referred to in paragraph 1 shall not exceed: (a) for the European Union, 500 euros in the case of small packages or 1,200 euros in the case of products forming part of travellers' personal luggage. The amounts to be used in other currency of a Member State of the European Union shall be the equivalent in that currency of the amounts expressed in euro as at the first working day of October of each year. The amounts shall be those published for that day by the European Central Bank, unless a different amount is communicated to the European Commission by 15 October of each year, and shall apply from 1 January of the following year. The European Commission shall notify Japan of the relevant amounts.

(b) for Japan, 100,000 yen or such amount as Japan may establish. 3. Each Party may provide that the basis for the claim as referred to in paragraph 2 of Article 3.16 shall not be required for an importation of a product for which the importing Party has waiv