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

The President of the Council shall designate the person empowered to proceed, on behalf of the European Union, to send the notification provided for in Article 16.13(2) of the Agreement, in order to express the consent of the European Union to be bound by the Agreement.

For the purpose of Articles 10.17 (System of Protection of Geographical Indications) and 10.18 (Amendment of List of Geographical Indications) of the Agreement, the position of the Union on the modifications of Annexes 10-A and 10-B to the Agreement shall be approved by the Commission.

For the purposes of Article 9.18 (Modification and Rectification of Coverage), the position of the Union on the modifications or rectifications of Annexes 9-A to 9-I to the Agreement shall be approved by the Commission.

The Free Trade Agreement between the European Union and the Republic of Singapore is hereby concluded.

(4)In accordance with Article 16.16 (No Direct Effect) of the Agreement, it should not confer rights or impose obligations on persons, other than those created between the Parties under public international law,

(2)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 the position to be adopted in the Trade Committee on certain modifications to the Agreement that are to be adopted by a simplified procedure. The Commission should be authorised to approve modifications to be adopted by the Trade Committee pursuant to Article 9.18 (Modification and Rectification of Coverage) as regards Annexes 9-A to 9-I to the Agreement, and pursuant to Article 10.17 (System of Protection of Geographical Indications) and 10.18 (Amendment of List of Geographical Indications) as regards Annexes 10-A and 10-B to the Agreement.

(1)In accordance with Council Decision No [XX], the Free Trade Agreement between the European Union and the Republic of Singapore (“Singapore”), hereinafter referred to as “the Agreement”, was signed on [XX XXX 2018].

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

on the conclusion of the Free Trade Agreement between the European Union and the Republic of Singapore

The Commission is mindful of the balance to be struck between moving forward with the reformed EU investment policy and the sensitivities of the Member States as regards the possible exercise of shared competence on these matters. The Commission has not, therefore made a proposal to provisionally apply the investment protection agreement. Nonetheless, should Member States wish to see a proposal for provisional application of the investment protection agreement, the Commission stands ready to make such a proposal.

Also in line with the negotiating directives, the IPA negotiated by the Commission will offer investors the option of a modern and reformed investment dispute resolution mechanism. This system ensures that investment protection rules are adhered to and seeks to strike a balance between protecting investors in a transparent manner and safeguarding the right of a State to regulate in order to pursue public policy objectives. The agreement sets up a standing international and fully independent dispute resolution system, consisting of permanent First Instance and Appeal Tribunals that will conduct dispute settlement proceedings in a transparent and impartial manner.

In line with the objectives set by the negotiating directives, the Commission ensured that EU investors and their investments in Singapore will be granted fair and equitable treatment and not be discriminated against compared to Singaporean investments that are in like situations. At the same time, the IPA protects EU investors and their investments in Singapore from expropriation, unless it is for public purposes, in accordance with due process, on a non-discriminatory basis and against payment of prompt, adequate, and effective compensation according to fair market value of the expropriated investment.

The agreement contains all the innovations of the EU’s new approach to investment protection and its enforcement mechanisms that are not present in the 12 existing bilateral investment treaties between Singapore and EU Member States. It is a very important feature of the IPA that it replaces and hence improves the 12 existing bilateral investment treaties.

The EU-Singapore IPA will ensure a high level of investment protection, while safeguarding the EU’s and Singapore’s rights to regulate and pursue legitimate public policy objectives such as the protection of public health, safety and the environment.

(10)a comprehensive and novel chapter to promote new opportunities in the “green growth sector”, in line with the EUs 2020 strategy.

(9)a swift dispute resolution mechanisms through either panel arbitration or with the help of a mediator; and

(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 social partners and civil society will be involved in its implementation and monitoring;

(7)a TRIPs-plus level of protection to EU GIs following their registration in Singapore once Singapore has established a GI register (which it has committed to do following the European Parliament’s consent to the FTA);

(6)a high level protection of intellectual property rights, including with regard to the enforcement of these rights, including at the border;

(5)Singapore’s commitment not to raise its tariffs (which are currently mostly not applied on a voluntary basis) on imports from the EU, as well as cheaper access of European businesses and consumers to products made in Singapore;

(4)based on international standards, a more trade-facilitative regime for the approval of European meat exports to Singapore;

(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 familiar in the EU in the sectors of motor vehicles, electronics, pharmaceuticals and medical devices as well as green technologies;

(2)new tendering opportunities for EU bidders, and especially in the utilities market where there are many leading EU suppliers;

(1)the comprehensive liberalisation of services and investment markets, including cross-cutting rules on licensing and for the mutual recognition of diplomas, and sector-specific rules designed to ensure a level playing field for EU businesses;

In line with the objectives set by the negotiating directives, the Commission 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.

Both of these objectives have 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 including geographical indications (GI). In all of these areas Singapore also agreed to new commitments which go significantly above what Singapore has so far been willing to accept, including in its FTA with the United States.

In negotiating this agreement, the Commission pursued two principal objectives: first, to provide the best possible terms of access for EU operators to Singapore’s market; and, second, to set a valuable point of reference for the EU’s other negotiations in the region.

The EU-Singapore FTA establishes the conditions for EU economic operators to take full advantage of the opportunities created in Singapore as the business and transport hub of Southeast Asia.

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 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 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 developments, registering also how identified priority issues have been addressed. The report will cover the EU-Singapore FTA as of its entry into force.

The institutional chapter of the IPA establishes a Committee with the main task to supervise and facilitate the implementation and application of the agreement. Among other tasks, the Committee may, subject to the completion of each side’s respective legal requirements and procedures, decide to appoint the Members of the ICS Tribunals, fix their monthly retainer and fees, and adopt binding interpretations of the agreement.

The Trade Committee has also the task to communicate with all interested parties, including private sector and civil society, in relation to the functioning and implementation of the agreement. In the agreement, both sides recognise the importance of transparency and openness and commit to consider the views of members of the public in order to draw on a broad range of perspectives in the implementation of the agreement.

The institutional chapter of the FTA establishes a Trade Committee that has as its main task to supervise and facilitate the implementation and application of the agreement. The Trade Committee is comprised of representatives of the EU and of Singapore who will meet every two years or at the request of either side. The Trade Committee will be in charge of supervising the work of all specialised committees established under the agreement (Committee on Trade in Goods; Committee on Sanitary and Phytosanitary Measures; Committee on Customs; and Committee on Trade in Services, Investment and Government Procurement).

The EU-Singapore FTA and IPA include institutional provisions that lay down an implementing bodies’ structure to continuously monitor the implementation, operation and impact of the agreements. The agreements being an integral part of the overall bilateral relation between the EU and Singapore as governed by the PCA, the mentioned structures will form part of a common institutional framework with the PCA.

The EU-Singapore IPA is expected to have a financial impact on the EU budget on the side of the expenditures. The agreement will be the EU’s second (after the EU-Canada Comprehensive Economic and Trade Agreement) to incorporate the Investment Court System (ICS) for the resolution of disputes between investors and states. An amount of € 200,000 of additional yearly expenditure is foreseen from 2018 onwards (subject to the entry into force of the agreement) to finance the permanent structure comprising a First Instance and an Appeal Tribunal. At the same time, the agreement entails the use of administrative resources under budget line XX 01 01 01 (Expenditure related to officials and temporary staff working with the Institution), considering that it is estimated that one Administrator will be dedicated as full-time equivalent to the tasks inherent to this agreement. This is indicated in the Legislative Financial Statement and is subject to the conditions mentioned in it.

The EU-Singapore FTA will have a financial impact on the EU budget on the side of the revenues. It is estimated that foregone duties could reach an amount of € 248.8 million upon full implementation of the agreement. The estimate is based on average imports projected for 2025 in the absence of an agreement and represents the annual loss in revenues resulting from the elimination of EU tariffs on imports from Singapore.

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

The EU-Singapore FTA and IPA are not subject to REFIT procedures. They nevertheless contain 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: less burdensome technical rules, compliance requirements, customs procedures and rules of origin, the protection of intellectual property rights, or the reduction in cost of litigation under the Investment Court System for claimants that are SMEs.

The TSIA, conducted by an external contractor and finalised in 2009, concluded that an ambitious EU-ASEAN FTA would deliver important positive impacts (in terms of GDP, income, trade and employment) for both the EU and Singapore. National income effects on the EU side were estimated at € 13 billion and for Singapore at € 7.5 billion. These figures could underestimate the impact, as they were based on trade patterns in 2007, and trade has grown substantially since (+32%).

A Trade Sustainability Impact Assessment of the FTA between the EU and ASEAN was carried out by the external contractor “Ecorys”.

Also, prior and during negotiations, the EU Member States were regularly informed and consulted orally and in writing on the different aspects of the negotiation 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-Singapore FTA Monitoring Group. The texts progressively resulting from the negotiations were circulated throughout the process to both institutions.

In addition, prior to the launch of bilateral negotiations with Singapore, the Commission conducted a public consultation on the future agreement that included a questionnaire prepared to obtain information from stakeholders that later helped the Commission in establishing priorities and taking decisions throughout the negotiating process. A summary of the results of the consultation was made public.

Both, the TSIA report and the consultations held in the context of its preparation, provided the Commission with input that has been of great value in all bilateral trade and investment negotiations launched since with individual ASEAN Member States.

In the framework of the preparation of the TSIA, the contractor consulted internal and external experts, organised public consultations in Brussels and in Bangkok, and held bilateral meetings and interviews with civil society in the EU and in ASEAN. 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 in relation to Southeast Asia.

Prior to the launch of bilateral negotiations with Singapore, a Trade Sustainability Impact Assessment (TSIA) of the FTA between the EU and the ASEAN was conducted by an external contractor to study the potential economic, social and environmental impact of a closer economic partnership between both regions.

Moreover, estimates based on economic modelling cannot account for the strategic value of the EU-Singapore FTA and IPA for the EU as crucial agreements for the EU’s wider agenda in the ASEAN region, and in Asia as a whole. Following the EU-Korea FTA, the EU-Singapore FTA will be the EU’s second high calibre trade agreement with a key Asian partner, while the EU-Singapore IPA will be in its turn the first investment protection agreement the EU enters into with an Asian partner.

In view of Singapore’s role as the hub for trade in goods and services between Europe and Southeast Asia, it is also likely that the gains from the agreement would grow further if and when the EU concludes agreements with other ASEAN Member States.

These estimates on the possible economic impact are deemed conservative given the difficulty to precisely quantify the effects of the removal of non-tariff barriers, which is a key component of the agreement.

Given the large difference in size of the two economies, as well as the relative openness of Singapore’s economy, it is inevitable that the benefits of the agreement for the partners differ. The analysis predicts that EU real GDP could grow by around € 550 million over a 10-year period, whilst Singapore’s economy could grow by € 2.7 billion over the same period.

After negotiations with Singapore were for its most part completed, an in-house team led by DG Trade’s Chief Economist carried out a study of the economic benefits to be expected from the agreement. The analysis predicts that EU exports to Singapore could rise by some € 1.4 billion over a 10-year period, while Singapore’s exports to the EU could grow by € 3.5 billion – a figure which includes shipments from the many EU subsidiaries in Singapore back to the EU.

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

This proposal is in line with the vision of the Europe 2020 strategy and contributes to the EUs trade and development objectives.

With regard to the IPA, the Court confirmed that, pursuant to Article 207 TFEU, the EU has exclusive competence with regard to all substantive provisions on investment protection, to the extent that these apply to foreign direct investment. The Court further confirmed the EUs exclusive competence with regard to the state-to-state dispute settlement mechanism in relation to investment protection. Finally, the Court stated that the EU has shared competence with regard to non-direct investment and investor-to-state dispute settlement (replaced later on by the Investment Court System in the IPA), where the Member States act as defendants. These elements cannot be separated in any coherent way from the substantive provisions or the state-to-state dispute settlement and hence should be included in EU-level agreements.

As confirmed by Opinion 2/15, the EU-Singapore FTA as presented to Council does not cover any matters that fall outside of the EU’s exclusive competence.

The EU-Singapore IPA is to be signed by the Union pursuant to a decision of the Council based on Article 218(5) TFEU and concluded by the Union pursuant to a decision of the Council based on Article 218(6) TFEU, following the European Parliament’s consent and ratification by the Member States in accordance with their respective internal procedures.

In addition, Article 218(7) TFEU has been added as a legal basis as it is appropriate for the Council to authorise the Commission to approve the position of the Union on certain modifications to the FTA given that the FTA provides for expedited and/or simplified procedures to approve such modifications. Therefore, the Commission should be authorised to approve modifications or rectifications to be adopted by the Trade Committee pursuant to Article 9.18 (Modification and Rectification of Coverage) as regards Annexes 9-A to 9-I and pursuant to Article 10.17 (System of Protection of Geographical Indications) and 10.18 (Amendment of List of Geographical Indications) of the FTA as regards Annexes 10-A and 10-B.

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

According to the Opinion 2/15, all the areas covered by the EU-Singapore FTA fall within the competence of the EU and, more particularly, within the scope of Articles 91, 100(2) and 207 TFEU. All substantive provisions on investment protection under the IPA, to the extent that these apply to foreign direct investment, are covered under Article 207 TFEU.

In view of the Court Opinion, and in light of the wide-ranging discussions on the architecture with the Council and the European Parliament following the Opinion, the initially negotiated text has been adjusted to create two self-standing agreements: an FTA and an IPA.

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 EU and the Member States. The text on investor-to-state dispute settlement was subsequently replaced by the Investment Court System in the IPA. 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 agreement that had been negotiated with Singapore, or whether the participation of the EU Member States would be necessary, or at least possible, in respect of certain matters.

Furthermore, like all other trade and investment agreements the Commission has negotiated, the EU-Singapore FTA and IPA fully safeguard public services and ensure that governments’ right to regulate in the public interest is fully preserved by the agreements and constitutes a basic underlying principle to them.

The EU-Singapore FTA and IPA are fully consistent with 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, consumer protection, etc.).

From the date of its entry into force, the EU-Singapore IPA will replace and supersede the bilateral investment treaties between the Republic of Singapore and EU Member States that are listed in Annex 5 (Agreements Referred to in Article 4.12) to the IPA.

The EU and Singapore’s longstanding trade and economic relationship has until now developed in the absence of a specific legal framework. The FTA and IPA that have been negotiated will constitute specific agreements giving effect to the trade and investment provisions of the PCA and will be an integral part of the overall bilateral relations between the EU and Singapore.

The negotiation of the FTA and the IPA was accompanied by the negotiation in parallel, by the European External Action Service, of a Partnership and Cooperation Agreement (PCA) between European Union and its Member States and the Republic of Singapore, which was initialled in October 2013. Once in force, the PCA will provide the legal framework to further develop the already longstanding and strong partnership between the EU and Singapore, in a broad range of areas, including political dialogue, trade, energy, transport, human rights, education, science and technology, justice asylum and migration.

The attached proposal for a Council Decision constitutes the legal instrument for the conclusion of the Free Trade Agreement between the European Union and the Republic of Singapore.

The European Commission will verify that a satisfactory outcome as regards the protection of EU geographical indications in Singapore prior to the entry into force of the Agreement has been achieved in accordance with the principles set out in the letter of the Minister of Trade and Industry of Singapore of 21 January 2013 and in light of the result of the informal public consultation undertaken by the Singaporean authorities in 2012.

In parallel to these proposals, the Commission will put forward a proposal for a horizontal safeguard regulation that will cover the EU-Singapore FTA among other agreements.

–Proposal for a Council Decision on the conclusion of the Investment Protection Agreement between the European Union and its Member States, of the one part, and the Republic of Singapore of the other part.

–Proposal for a Council Decision on the signing, on behalf of the European Union, of the Investment Protection Agreement between the European Union and its Member States, of the one part, and the Republic of Singapore of the other part;

–Proposal for a Council Decision on the conclusion of the Free Trade Agreement between the European Union and the Republic of Singapore;

–Proposal for a Council Decision on the signing, on behalf of the European Union, of the Free Trade Agreement between the European Union and the Republic of Singapore;

On the basis of the negotiating directives adopted by the Council in 2007, and supplemented in 2011 to include investment protection, the Commission has negotiated with the Republic of Singapore an ambitious and comprehensive FTA and an Investment Protection Agreement (IPA), with a view to creating new opportunities and legal certainty for trade and investment between both partners to develop. The legally reviewed texts of the agreements have been made public and can be found on the following link:

On 12 September 2011 the Council authorised the Commission to extend the on-going negotiations with Singapore to cover also investment protection, based on a new EU competence under the Lisbon Treaty.

On 22 December 2009, the Council agreed on the principle of launching bilateral negotiations with individual ASEAN Member States, based on the authorisation and negotiating directives of 2007, whilst preserving the strategic objective of a region-to-region agreement. The Council also authorised the Commission to start bilateral negotiations on a free trade agreement with Singapore, which would serve as a first step towards the objective of the timely launch of such negotiations with other relevant ASEAN Member States. Bilateral negotiations with Singapore commenced in March 2010 and the EU has since opened bilateral FTA negotiations with other ASEAN Member States: Malaysia (2010), Vietnam (2012), Thailand (2013), the Philippines (2015) and Indonesia (2016).

On 23 April 2007, the Council authorised the Commission to enter into negotiations for a region-to-region Free Trade Agreement (FTA) with Member States of the ASEAN. It being understood that the objective was to negotiate a region-to-region FTA, the authorisation provided however for the possibility of bilateral negotiations in the event that it was not possible to reach an agreement to negotiate jointly with a grouping of Member States of the ASEAN. In light of difficulties encountered in the region-to-region negotiations, both sides acknowledged that an impasse had been reached and agreed to pause these.

Within the ASEAN, Singapore is by far the EU’s largest partner, accounting for slightly under one-third of EU-ASEAN trade in goods and services, and roughly two-thirds of investments between the two regions. Over 10,000 EU companies are established in Singapore and use it as a hub to serve the whole Pacific Rim.

The dynamically growing Southeast Asian economies, with their over 600 million consumers and a rapidly rising middle class, are key markets for European Union exporters and investors. With a total € 208 billion of trade in goods and € 77 billion of trade in services (2016), the Association of Southeast Asian Nations (ASEAN) taken as a whole is the EU’s third largest trading partner outside Europe, after the US and China. At the same time, a total € 263 billion foreign direct investment stock (2016) in the ASEAN makes the EU the first foreign direct investor in the ASEAN, while the ASEAN as a whole is in its turn the second largest Asian foreign direct investor in the EU – with a total foreign direct investment stock of € 116 billion (2016).

on the conclusion of the Free Trade Agreement between the European Union and the Republic of Singapore

EUROPEAN COMMISSION Brussels, 18.4.2018 COM(2018) 196 final ANNEX

to the Proposal for a Council Decision on the conclusion of the Free Trade Agreement between the European Union and the Republic of Singapore





FREE TRADE AGREEMENT BETWEEN THE EUROPEAN UNION AND THE REPUBLIC OF SINGAPORE The European Union, hereinafter referred to as "the Union", and the Republic of Singapore, hereinafter referred to as "Singapore", RECOGNISING their longstanding and strong partnership based on the common principles and values reflected in the Partnership and Cooperation Agreement, and their important economic, trade and investment relationship; DESIRING to further strengthen their relationship as part of and in a manner coherent with their overall relations, and convinced that this Agreement will create a new climate for the development of trade and investment between the Parties; RECOGNISING that this Agreement will complement and promote regional economic integration efforts; DETERMINED to strengthen their economic, trade, and investment relations in accordance with the objective of sustainable development, in its economic, social and environmental dimensions, and to promote trade and investment in a manner mindful of high levels of environmental and labour protection and relevant internationally-recognised standards and agreements to which they are Parties; DESIRING to raise living standards, promote economic growth and stability, create new employment opportunities and improve the general welfare and, to this end, reaffirming their commitment to promoting trade and investment liberalisation;



CONVINCED that this Agreement will create an expanded and secure market for goods and services, thus enhancing the competitiveness of their firms in global markets; REAFFIRMING each Party's right to adopt and enforce measures necessary to pursue legitimate policy objectives such as social, environmental, security, public health and safety, promotion and protection of cultural diversity; REAFFIRMING their commitment to the Charter of the United Nations signed in San Francisco on 26 June 1945 and having regard to the principles articulated in the Universal Declaration of Human Rights adopted by the General Assembly of the United Nations on 10 December 1948; RECOGNISING the importance of transparency in international trade to the benefit of all stakeholders; SEEKING to establish clear and mutually advantageous rules governing their trade and investment and to reduce or eliminate the barriers to mutual trade and investment; RESOLVED to contribute to the harmonious development and expansion of international trade by removing obstacles to trade 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 and arrangements to which they are party, HAVE AGREED AS FOLLOWS:

CHAPTER ONE OBJECTIVES AND GENERAL DEFINITIONS

ARTICLE 1.1 Establishment of a Free Trade Area The Parties to this Agreement hereby establish a free trade area, consistent with Article XXIV of GATT 1994 and Article V of GATS. ARTICLE 1.2 Objectives The objectives of this Agreement are to liberalise and facilitate trade and investment between the Parties in accordance with the provisions of this Agreement. ARTICLE 1.3 Definitions of General Application

For purposes of this Agreement, unless otherwise specified:

"Agreement on Agriculture" means the Agreement on Agriculture contained in Annex 1A of the WTO Agreement; "Agreement on Government Procurement" means the Agreement of Government Procurement contained in Annex 4 of the WTO Agreement; "Agreement on Preshipment Inspection" means the Agreement on Preshipment Inspection contained in Annex 1A of the WTO Agreement; "Anti-Dumping Agreement" means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 contained in Annex 1A of the WTO Agreement; "Customs Valuation Agreement" means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 contained in Annex 1A of the WTO Agreement; "day" means a calendar day; "DSU" means the Understanding on Rules and Procedures Governing the Settlement of Disputes contained in Annex 2 of the WTO Agreement; "GATS" means the General Agreement on Trade in Services contained in Annex 1B of the WTO Agreement; "GATT 1994" means the General Agreement on Tariffs and Trade 1994 contained in Annex 1A of the WTO Agreement;



"Harmonized System" means the Harmonized Commodity Description and Coding System, including all legal notes and amendments thereto (hereinafter referred to as the "HS"); "IMF" means the International Monetary Fund; "Import Licensing Agreement" means the Agreement on Import Licencing Procedures contained in Annex 1A of the WTO Agreement; "measure" means any law, regulation, procedure, requirement or practice; "natural person of a Party" means a national of Singapore, or of one of the Member States of the Union, according to their respective legislation; "Partnership and Cooperation Agreement" means the Partnership and Cooperation Agreement between the European Union and its Member States, of the one part, and the Republic of Singapore, of the other part, signed on […]; "person" means a natural person or a juridical person; "Safeguards Agreement" means the Agreement on Safeguards contained in Annex 1A of the WTO Agreement; "SCM Agreement" means the Agreement on Subsidies and Countervailing Measures contained in Annex 1A of the WTO Agreement;

"SPS Agreement" means the Agreement on the Application of Sanitary and Phytosanitary Measures contained in Annex 1A of the WTO Agreement;

"TBT Agreement" means the Agreement on Technical Barriers to Trade contained in Annex 1A of the WTO Agreement; "TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property Rights contained in Annex 1C of the WTO Agreement; "WIPO" means the World Intellectual Property Organization; "WTO Agreement" means the Marrakesh Agreement Establishing the World Trade Organization done at Marrakesh on 15 April 1994; "WTO" means the World Trade Organization.

CHAPTER TWO NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS SECTION A COMMON PROVISIONS

ARTICLE 2.1 Objective The Parties shall progressively and reciprocally liberalise trade in goods over a transitional period starting from the entry into force of this Agreement in accordance with this Agreement and in conformity with Article XXIV of GATT 1994. ARTICLE 2.2 Scope This Chapter shall apply to trade in goods between the Parties.

ARTICLE 2.3 National Treatment Each Party shall accord national treatment to the goods of the other Party in accordance with Article III of the GATT 1994, including its Notes and Supplementary Provisions. To this end, the obligations contained in Article III of GATT 1994, including its Notes and Supplementary Provisions, are incorporated into and made part of this Agreement, mutatis mutandis.

ARTICLE 2.4 Customs Duty For the purposes of this Chapter, a customs duty includes any duty or charge of any kind imposed on or in connection with the importation or exportation of a good, including any form of surtax or surcharge imposed on or in connection with such importation or exportation. A "customs duty" does not include any: (a) charge equivalent to an internal tax imposed consistently with Article 2.3 (National Treatment); (b) duty imposed consistently with Chapter Three (Trade Remedies);

(c) duties applied consistently with Article VI, Article XVI, Article XIX of GATT 1994, the Anti-Dumping Agreement, the SCM Agreement, Article 5 of the Agreement on Agriculture and the DSU; (d) fee or other charge imposed consistently with Article 2.10 (Fees and Formalities Connected with Importation and Exportation). ARTICLE 2.5

Classification of Goods The classification of goods in trade between the Parties shall be governed by each Party's respective tariff nomenclature in conformity with the HS and its amendments. SECTION B REDUCTION AND/OR ELIMINATION OF CUSTOMS DUTIES ARTICLE 2.6 Reduction and/or Elimination of Customs Duties on Imports 1. Each Party shall reduce and/or eliminate its customs duties on imported goods originating in the other Party in accordance with the Schedules set out in Annex 2-A. For the purposes of this Chapter, "originating" means in accordance with the rules of origin set out in Protocol 1.

2. The base rate of customs duties on imports, to which the successive reductions are to be applied under paragraph 1, shall be that specified in the Schedules in Annex 2-A. 3. If at any moment a Party reduces its applied most favoured nation (hereinafter referred to as "MFN") customs duty rates on imports after the date of entry into force of this Agreement, that duty rate shall apply if and for as long as it is lower than the customs duty rate on imports calculated in accordance with its Schedule in Annex 2-A.

4. Three years after the entry into force of this Agreement, on the request of either Party, the Parties shall consult to consider accelerating and broadening the scope of the reduction and elimination of customs duties on imports. A decision by the Parties in the Committee on Trade in Goods on such acceleration or broadening shall supersede any duty rate or staging category determined pursuant to their Schedules for that good. ARTICLE 2.7 Elimination of Customs Duties and Taxes on Exports Neither Party shall maintain or institute any customs duty or tax on or in connection with the exportation or sale for export of goods to the other Party, or any internal taxes on goods exported to the other Party that are in excess of those imposed on like goods destined for internal sale.

ARTICLE 2.8 Standstill Upon the entry into force of the Agreement, neither Party shall increase any existing customs duty, or introduce any new customs duty, on the importation of a good originating in the other Party. This shall not preclude either Party from raising a customs duty to the level established in its Schedule in Annex 2-A following a unilateral reduction. SECTION C

NON-TARIFF MEASURES ARTICLE 2.9 Import and Export Restrictions 1. Neither Party shall adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, in accordance with Article XI of GATT 1994, including its notes and supplementary provisions. To this end, Article XI of GATT 1994, its notes and supplementary provisions are incorporated into and made part of this Agreement, mutatis mutandis.

2. The Parties understand that before taking any measures provided for in subparagraphs 2(a) and 2(c) of Article XI of GATT 1994, the Party intending to take the measures shall supply the other Party with all relevant information, with a view to seeking a solution acceptable to the Parties. The Parties may agree on any means needed to put an end to the difficulties. If no agreement is reached within thirty days of supplying such information, the exporting Party may apply measures under this Article on the exportation of the good concerned. Where exceptional and critical circumstances requiring immediate action make prior information or examination impossible, the Party intending to take the measures may apply forthwith the precautionary measures necessary to deal with the situation and shall inform the other Party immediately thereof. ARTICLE 2.10 Fees and Formalities Connected with Importation and Exportation 1. Each Party shall ensure, in accordance with Article VIII of GATT 1994, including its notes and supplementary provisions, that all fees and charges of whatever character (other than customs duties, and measures listed in paragraphs (a), (b) and (c) of Article 2.4 (Customs Duty)) imposed on or in connection with importation or exportation of goods are limited in amount to 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 or exports for fiscal purposes. 2. Each Party shall make available, via an officially designated medium including through the internet, fees and charges it imposes in connection with importation or exportation.



3. No Party shall require consular transaction, including related fees and charges, in connection with the importation of any good of another Party. ARTICLE 2.11 Import and Export Licensing Procedures 1. The Parties affirm their existing rights and obligations under the Import Licensing Agreement. 2. The Parties shall introduce and administer any import or export licensing procedures in accordance with: (a) Paragraphs 1 through 9 of Article 1 of the WTO Import Licensing Agreement; (b) Article 2 of the WTO Import Licensing Agreement; (c) Article 3 of the WTO Import Licensing Agreement.

To this end, the provisions referred to in subparagraphs (a), (b) and (c) of this paragraph are incorporated into and made part of this Agreement. The Parties shall apply those provisions, mutatis mutandis, for any export licensing procedures. 3. The Parties shall ensure that all export licensing procedures are neutral in application and administered in a fair, equitable, non-discriminatory and transparent manner.

4. The Parties shall only adopt or maintain licensing procedures as a condition for importation into its territory or exportation from its territory to the other Party when other appropriate procedures to achieve an administrative purpose are not reasonably available. 5. The Parties shall not adopt or maintain non-automatic import or export licensing procedures unless necessary to implement a measure that is consistent with this Agreement. Any Party adopting non-automatic licensing procedures shall indicate clearly the measure being implemented through such licensing procedure. 6 Any Party introducing export licensing procedures or changes in these procedures shall notify the Committee on Trade in Goods sixty days in advance of the publication of those procedures. This notification shall contain the information required under Article 5 of the Import Licensing Agreement. 7. Each Party shall respond within sixty days to enquiries from the other Party regarding any licensing procedures which the Party to which the request is addressed intends to adopt or has adopted or maintained, as well as the criteria for granting and/or allocating import or export licenses.

ARTICLE 2.12 State Trading Enterprises 1. The Parties affirm their existing rights and obligations under Article XVII of GATT 1994, its notes and supplementary provisions and the Understanding on the Interpretation of Article XVII of the General Agreement on Tariffs and Trade 1994, contained in Annex 1-A to the WTO Agreement, which are hereby incorporated into and made part of this Agreement, mutatis mutandis. 2. The Parties may request information from the other Party bilaterally as foreseen in subparagraphs 4(c) and 4(d) of Article XVII of GATT 1994. ARTICLE 2.13

Elimination of Sectoral Non-Tariff Measures 1. The Parties shall undertake further commitments on sector-specific non-tariff measures on goods as set out in Annex 2-B and Annex 2-C (hereinafter referred to as "Sectoral Annexes"). To this end, the Parties may, by decision in the Committee on Trade in Goods, amend the Sectoral Annexes. 2. Upon the request of either Party, the Parties shall enter into negotiations with the aim of broadening the scope of their commitments on sector-specific non-tariff measures on goods.

SECTION D SPECIFIC EXCEPTIONS RELATED TO GOODS ARTICLE 2.14 General Exceptions 1. Nothing in this Chapter prevents the taking of measures in accordance with Article XX of GATT 1994, its Notes and Supplementary Provisions, which are hereby incorporated into and made part of this Agreement, mutatis mutandis. 2. The Parties understand that before taking any measures provided for in paragraphs (i) and (j) of Article XX of GATT 1994, the exporting Party intending to take the measures shall supply the other Party with all relevant information, with a view to seeking a solution acceptable to the Parties. The Parties may agree on any means needed to put an end to the difficulties. If no agreement is reached within thirty days, the exporting Party may apply measures under this Article on the exportation of the good concerned. Where exceptional and critical circumstances requiring immediate action make prior information or examination impossible, the Party intending to take the measures may apply forthwith the precautionary measures necessary to deal with the situation and shall inform the other Party immediately thereof.



SECTION E INSTITUTIONAL PROVISIONS ARTICLE 2.15 Committee on Trade in Goods 1. The Committee on Trade in Goods established pursuant to Article 16.2 (Specialised Committees) shall meet on the request of a Party or of the Trade Committee to consider any matter arising under this Chapter and comprise representatives of the Parties. 2. The Committee's functions shall include: (a) monitoring the implementation of this Chapter and Annexes 2-A, 2-B and 2-C; (b) promoting trade in goods between the Parties, including through consultations on accelerating and broadening the scope of tariff elimination and broadening of the scope of commitments on non-tariff measures under this Agreement, and other issues as appropriate. As a result of these consultations, the Committee may, by decision, amend or expand the Annexes 2-A, 2-B and 2-C as required; and

(c) addressing tariff and non-tariff measures to trade in goods between the Parties and, if appropriate, referring such matters to the Trade Committee for its consideration.

CHAPTER THREE TRADE REMEDIES SECTION A ANTI-DUMPING AND COUNTERVAILING MEASURES ARTICLE 3.1 General Provisions 1. The Parties affirm their rights and obligations arising under Article VI of GATT 1994, the Anti-Dumping Agreement and the SCM Agreement and shall apply anti-dumping and countervailing measures in accordance with the provisions of this Chapter. 2. The Parties, recognising that anti-dumping and countervailing measures can be abused to obstruct trade, agree that:

(a) such measures should be used in full compliance with the relevant WTO requirements and should be based on a fair and transparent system; and (b) careful consideration should be given to the interests of the Party against which such a measure is to be imposed.

3. For the purpose of this Section, origin shall be determined in accordance with the nonpreferential rules of origin of the Parties. ARTICLE 3.2 Transparency and Information Exchange 1. After receipt by a Party's competent authorities of a properly documented anti-dumping application with respect to imports from the other Party, and no later than fifteen days before initiating an investigation, the Party shall provide written notification to the other Party of its receipt of the application. 2. After receipt by a Party's competent authorities of a properly documented countervailing duty application with respect to imports from the other Party, and no later than fifteen days before initiating an investigation, the Party shall provide written notification to the other Party of its receipt of the application and afford the other Party the possibility to consult with its competent authorities regarding the application with a view to clarifying the factual situation and to arriving at a mutually agreed solution. The Parties shall endeavour to hold these consultations as soon as possible thereafter.

3. Both Parties shall ensure, immediately after any imposition of provisional measures and in any case before final determination is made, full and meaningful disclosure of all essential facts and considerations which form the basis for the decision to apply measures. This is without prejudice to Article 6.5 of the Anti-Dumping Agreement and Article 12.4 of the SCM Agreement. Any disclosure shall be made in writing, and allow interested parties sufficient time to make their comments. 4. Each interested party shall be granted the possibility to be heard in order to express their views during trade remedies investigations.

ARTICLE 3.3 Lesser Duty Rule Should a Party decide to impose any anti-dumping or countervailing duty, the amount of such duty shall not exceed the margin of dumping or countervailable subsidies, and it should be less than the margin if such lesser duty would be adequate to remove the injury to the domestic industry.

ARTICLE 3.4 Consideration of Public Interest Anti-dumping or countervailing measures shall not be applied by a Party where, on the basis of the information made available during the investigation, it can clearly be concluded that it is not in the public interest to apply such measures. Public interest shall take into account the situation of the domestic industry, importers and their representative associations, representative users and representative consumer organisations, to the extent they have provided relevant information to the investigating authorities. ARTICLE 3.5 Exclusion from Bilateral Dispute Settlement and Mediation Mechanism The provisions of this Section shall not be subject to Chapter Fourteen (Dispute Settlement) and Chapter Fifteen (Mediation Mechanism).



SECTION B GLOBAL SAFEGUARD MEASURES ARTICLE 3.6 General Provisions 1. Each Party retains its rights and obligations under Article XIX of GATT 1994, the Safeguards Agreement and Article 5 of the Agreement on Agriculture. Unless otherwise provided in this Section, this Agreement does not confer any additional rights or obligations on the Parties with regard to actions taken pursuant to Article XIX of GATT 1994 and the Safeguards Agreement. 2. No Party shall apply, with respect to the same good, at the same time: (a) a bilateral safeguard measure; and (b) a measure under Article XIX of GATT 1994 and the Safeguards Agreement. 3. For the purposes of this Section, origin shall be determined in accordance with the nonpreferential rules of origin of the Parties.



ARTICLE 3.7 Transparency 1. Notwithstanding Article 3.6 (General Provisions), at the request of the other Party and provided the latter has a substantial interest, the Party when initiating a safeguard investigation or when intending to take safeguard measures shall provide immediately, and at least seven days in advance of the date of such initiation or imposition, ad hoc written notification of all pertinent information leading to the initiation of a safeguard investigation or the imposition of safeguard measures including on the provisional findings and the final findings of the investigation, where relevant. This is without prejudice to Article 3.2 of the Safeguards Agreement. 2. When imposing safeguard measures, the Parties shall endeavour to impose them in a way that least affects their bilateral trade. 3. For the purposes of paragraph 2, if one Party considers that the legal requirements are met for the imposition of definitive safeguard measures, the Party intending to apply such measures shall notify the other Party and give the possibility to hold bilateral consultations. If no satisfactory solution has been reached within thirty days of the notification, the importing Party may adopt the definitive safeguard measures. The possibility for consultations should also be offered to the other Party in order to exchange views on the information referred to in paragraph 1.

ARTICLE 3.8 Exclusion from Bilateral Dispute Settlement and Mediation Mechanism The provisions of this Section shall not be subject to Chapter Fourteen (Dispute Settlement) and Chapter Fifteen (Mediation Mechanism).

SECTION C BILATERAL SAFEGUARD CLAUSE ARTICLE 3.9 Definitions For the purposes of this Section: (a) "serious injury" and "threat of serious injury" shall be understood in accordance with Articles 4.1(a) and (b) of the Safeguards Agreement. To this end, Articles 4.1(a) and (b) of the Safeguards Agreement are incorporated into and made part of this Agreement, mutatis mutandis; and (b) "transition period" means a period of ten years from the entry into force of this Agreement.

ARTICLE 3.10 Application of Bilateral Safeguard Measure

1. If, as a result of the reduction or elimination of a customs duty under this Agreement, originating goods of a Party are being imported into the territory of the other Party in such increased quantities, in absolute terms or relative to domestic production, and under such conditions as to cause or threaten to cause serious injury to a domestic industry producing like or directly competitive goods, the importing Party may, during the transition period only, adopt measures provided for in paragraph 2 in accordance with the conditions and procedures laid down in this Section. 2. The importing Party may take a bilateral safeguard measure which: (a) suspends further reduction of the rate of customs duty on the good concerned provided for under Annex 2-A; or (b) increases the rate of customs duty on the good concerned to a level which does not exceed the lesser of: (i) the MFN applied rate of customs duty on the good in effect at the time the measure is taken; or (ii) the base rate of customs duty specified in the Schedules included in Annex 2-A pursuant to paragraph 2 of Article 2.6 (Reduction and/or Elimination of Customs Duties on Imports).

ARTICLE 3.11 Conditions and Limitations 1. A Party shall notify the other Party in writing of the initiation of an investigation described in paragraph 2 and consult with the other Party as far in advance of applying a bilateral safeguard measure as practicable, with a view to: (a) reviewing the information arising from the investigation and whether the conditions laid out in this Article are met;

(b) exchanging views on the measure and its appropriateness in light of the objectives of this Section to remove serious injury or threat thereof to domestic industry caused by an increase in imports as set out in paragraph 1 of Article 3.10 (Application of Bilateral Safeguard Measure); and (c) exchanging preliminary views on compensation as set out in Article 3.13 (Compensation). 2. A Party shall apply a bilateral safeguard measure only following an investigation by its competent authorities in accordance with Articles 3, 4.2(a) and 4.2(c) of the Safeguards Agreement and to this end, Articles 3, 4.2(a) and 4.2(c) of the Safeguards Agreement are incorporated into and made part of this Agreement, mutatis mutandis.

3. The determination referred to in Article 3.10 (Application of Bilateral Safeguard Measure) shall not be made unless the investigation demonstrates on the basis of objective evidence the existence of a causal link between increased imports from the other party and serious injury or threat thereof. In this respect, due consideration shall be given to other factors, including imports of the same product from other countries. 4. Each Party shall ensure that its competent authorities complete any such investigation within one year from the dates of its initiation. 5. Neither Party may apply a bilateral safeguard measure as set out in paragraph 1 of Article 3.10 (Application of Bilateral Safeguard Measure): (a) except to the extent, and for such time, as may be necessary to prevent or remedy serious injury and to facilitate adjustment; (b) for a period exceeding two years, except that the period may be extended by up to two years if the competent authorities of the importing Party determine, in conformity with the procedures specified in this Article, that the measure continues to be necessary to prevent or remedy serious injury and to facilitate adjustment and that there is evidence that the industry is adjusting, provided that the total period of application of a safeguard measure, including the period of initial application and any extension thereof, shall not exceed four years; or (b) beyond the expiration of the transition period, except with the consent of the other Party.

6. No measure shall be applied again to the import of the same good during the transition period, unless a period of time equal to half of the period during which the safeguard measure was applied previously has elapsed. In this case, paragraph 3 of Article 3.13 (Compensation) shall not apply.

7. When a Party terminates a bilateral safeguard measure, the rate of customs duty shall be the rate that, according to its Schedule included in Annex 2-A, would have been in effect but for the measure. ARTICLE 3.12 Provisional Measures 1. In critical circumstances where delay would cause damage that would be difficult to repair, a Party may apply a bilateral safeguard measure on a provisional basis pursuant to a preliminary determination that there is clear evidence that imports of an originating good from the other Party have increased as the result of the reduction or elimination of a customs duty under this Agreement, and such imports cause serious injury, or threat thereof, to the domestic industry. The duration of any provisional measure shall not exceed 200 days, during which time the Party shall comply with the requirements of paragraphs 2 and 3 of Article 3.11 (Conditions and Limitations). The Party shall promptly refund any tariff increases if the investigation described in paragraph 2 of Article 3.11 (Conditions and Limitations) does not result in a finding that the requirements of Article 3.10 (Application of Bilateral Safeguard Measure) are met. The duration of any provisional measure shall be counted as part of the period prescribed by subparagraph 5(b) of Article 3.11 (Conditions and Limitations).

2. If a Party takes a provisional measure pursuant to this Article, the Party shall notify the other Party in writing prior to taking such measure and shall initiate consultations with the other Party immediately after such measure is taken. ARTICLE 3.13 Compensation 1. A Party applying a bilateral safeguard measure shall consult with the other Party in order to mutually agree on appropriate trade liberalising compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional duties expected to result from the safeguard measure. The Party shall provide an opportunity for such consultations no later than thirty days after the application of the bilateral safeguard measure. 2. If the consultations under paragraph 1 do not result in an agreement on trade liberalising compensation within thirty days after the consultations begin, the Party whose goods are subject to the safeguard measure may suspend the application of substantially equivalent concessions to the Party applying the safeguard measure. The exporting Party shall notify the other Party in writing at least thirty days before suspending concessions under this paragraph.

3. The right of suspension referred to in paragraph 2 shall not be exercised for the first twenty-four months during which a bilateral safeguard measure is in effect, provided that the safeguard measure conforms to the provisions of this Agreement.

CHAPTER FOUR TECHNICAL BARRIERS TO TRADE ARTICLE 4.1 Objectives The objective of this Chapter is to facilitate and increase trade in goods between the Parties, by providing a framework to prevent, identify and eliminate unnecessary barriers to trade within the scope of the TBT Agreement. ARTICLE 4.2 Scope and Definitions

1. This Chapter applies to the preparation, adoption and application of all standards, technical regulations and conformity assessment procedures as defined in Annex 1 of the TBT Agreement, which may affect trade in goods between the Parties, regardless of the origin of those goods. 2. Notwithstanding paragraph 1, this Chapter does not apply to: (a) purchasing specifications prepared by governmental bodies for production or consumption requirements of such bodies; or

(b) sanitary and phytosanitary measures as defined in Annex A of the SPS Agreement which are covered by Chapter Five of this Agreement. 3. For the purposes of this Chapter, the definitions of Annex 1 to the TBT Agreement shall apply. ARTICLE 4.3 Affirmation of the TBT Agreement The Parties affirm their existing rights and obligations with respect to each other under the TBT Agreement which is incorporated into and made part of this Agreement, mutatis mutandis. ARTICLE 4.4

Joint Cooperation 1. The Parties shall strengthen their cooperation in the field of standards, technical regulations and conformity assessment procedures with a view to increasing the mutual understanding of their respective systems and facilitating access to their respective markets. 2. The Parties shall seek to identify and develop regulatory cooperation initiatives appropriate for the particular issues or sectors which may include, but are not limited to:

(a) exchanging information and experiences on the preparation and application of their technical regulations and the use of good regulatory practice; (b) where appropriate, simplifying technical regulations, standards and conformity assessment procedures; (c) avoiding unnecessary divergence in their approaches to technical regulations and conformity assessment procedures, and working towards the possibility of converging or aligning technical regulations with international standards; (d) encouraging cooperation between their respective bodies, public or private, responsible for metrology, standardisation, testing, certification and accreditation; (e) ensuring efficient interaction of regulatory authorities at national, regional and international levels, for instance, by referring enquiries from a Party to the appropriate regulatory authorities; and (f) exchanging information on developments in relevant regional and multilateral fora related to standards, technical regulations and conformity assessment procedures. 3. Upon request, a Party shall give appropriate consideration to proposals that the other Party makes for cooperation under the terms of this Chapter.



ARTICLE 4.5 Standards 1. The Parties affirm their obligations under Article 4.1 of the TBT Agreement to ensure that their standardising bodies accept and comply with the Code of Good Practice for the Preparation, Adoption and Application of Standards in Annex 3 to the TBT Agreement. 2. With a view to harmonising standards on as wide a basis as possible, the Parties shall encourage their standardising bodies, as well as the regional standardising bodies of which they or their standardising bodies are Members, to cooperate with the relevant standardisation bodies of the other Party in international standardisation activities. 3. The Parties undertake to exchange information on: (a) their use of standards in support of technical regulations; (b) each other's standardisation processes, and the extent of use of international standards or regional standards as a base for their national standards; and (c) cooperation agreements implemented by either Party on standardisation, provided the information can be made available to the public.

ARTICLE 4.6

Technical Regulations The Parties agree to make best use of good regulatory practice with regard to the preparation, adoption and application of technical regulations, as provided for in the TBT Agreement including: (a) when developing a technical regulation, to consider, inter alia, the impact of the envisaged technical regulation and the available regulatory and non-regulatory alternatives to the proposed technical regulation which may fulfil the Party's legitimate objectives; (b) consistent with Article 2.4 of the TBT Agreement, to use, to the maximum extent possible, relevant international standards as a basis for their technical regulations, except when such international standards would be an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued; where international standards have not been used as a basis, to explain upon request to the other Party the reasons why such standards have been considered inappropriate or ineffective for the aim pursued; and (c) consistent with Article 2.8 of the TBT Agreement, wherever appropriate, to specify technical regulations based on product requirements in terms of performance rather than design or descriptive characteristics.

ARTICLE 4.7 Conformity Assessment Procedures 1. The Parties recognise that a broad range of mechanisms exist to facilitate the acceptance of the results of conformity assessment procedures, including: (a) the importing Party's reliance on a supplier's declaration of conformity; (b) agreements on mutual acceptance of the results of conformity assessment procedures with respect to specific technical regulations conducted by bodies located in the territory of the other Party;

(c) use of accreditation procedures to qualify conformity assessment bodies; (d) government designation of conformity assessment bodies, including bodies located in the territory of the other Party; (e) unilateral recognition by a Party of the results of conformity assessment procedures conducted in the territory of the other Party; (f) voluntary arrangements between conformity assessment bodies in the respective territories of each Party; and

(g) use of regional or international multilateral recognition agreements and arrangements of which the Parties are parties. 2. Having regard in particular to those considerations, the Parties shall: (a) intensify their exchange of information on these and other mechanisms with a view to facilitating the acceptance of conformity assessment results; (b) exchange information on the criteria used to select appropriate conformity assessment procedures for specific products and, in line with Article 5.1.2 of the TBT Agreement, require that conformity assessment procedures are not more strict or applied more strictly than necessary to give the importing Party adequate confidence that products conform with the applicable technical regulations or standards, taking account of the risks non-conformity would create; (c) exchange information on accreditation policy and consider how to make the best use of international standards for accreditation and international agreements involving the Parties' accreditation bodies, for example through the mechanisms of the International Laboratory Accreditation Co-operation and the International Accreditation Forum; and (d) ensure that, insofar as two or more conformity assessment bodies are authorised by a Party to carry out conformity assessment procedures required for placing the product on the market, economic operators may choose among them.



3. The Parties reaffirm their obligation under Article 5.2.5 of the TBT Agreement that fees imposed for mandatory conformity assessment of imported products shall be equitable in relation to any fees chargeable for assessing the conformity of like products of national origin or originating in any other country, taking into account communication, transportation and other costs arising from differences between location of facilities of the applicant and the conformity assessment body. 4. Upon request by either Party, the Parties may decide to engage in consultations with a view to defining sectoral initiatives regarding the use of conformity assessment procedures or the facilitation of acceptance of conformity assessment results that are appropriate for the respective sectors. The Party making the request should substantiate it with relevant information on how this sectoral initiative would facilitate trade between the Parties. In these consultations, all mechanisms described in paragraph 1 may be considered. Where a Party declines such a request from the other Party, it shall, upon request, explain its reasons. ARTICLE 4.8 Transparency The Parties reaffirm their transparency obligations under the TBT Agreement with regard to the preparation, adoption and application of standards, technical regulations and conformity assessment procedures, and agree: (a) where a part of the process of developing a technical regulation is open to public consultation, to take the other Party's views into account and, without discrimination, to provide reasonable opportunities for the other Party and its interested persons to make comments;

(b) when making notifications in accordance with Article 2.9 of the TBT Agreement, to allow at least sixty days following the notification for the other Party to provide comments in writing on the proposal and where practicable, to give appropriate consideration to reasonable requests for extending the comment period; (c) to allow sufficient time between the publication of technical regulations and their entry into force for economic operators of the other Party to adapt, except where urgent problems of safety, health, environmental protection or national security arise or threaten to arise; and (d) to make available to the other Party or its economic operators relevant information (for example through a public website, if available) on technical regulations, standards and conformity assessment procedures in force and, as appropriate and available, written guidance on compliance with its technical regulations, upon request and without undue delay.

ARTICLE 4.9 Market Surveillance The Parties undertake to exchange information on market surveillance and enforcement activities.

ARTICLE 4.10 Marking and Labelling 1. The Parties note that, according to paragraph 1 of Annex 1 of the TBT Agreement, a technical regulation may include or deal exclusively with marking or labelling requirements, and they agree that, where their technical regulations contain mandatory marking or labelling, they will ensure that these are not prepared with a view to, or with the effect of, creating unnecessary obstacles to international trade, and should not be more trade restrictive than necessary to fulfil a legitimate objective, as referred to under Article 2.2 of the TBT Agreement. 2. The Parties agree that where a Party requires mandatory marking or labelling of products: (a) the Party shall endeavour to restrict its requirements only to those which are relevant for consumers or users of the product or to indicate the product's conformity with the mandatory requirements; (b) the Party may specify the information to be provided on the label and may require compliance with certain regulatory requirements for the affixing of the label, but shall not require any prior approval or certification of labels and markings as a precondition for sale of the products on its market unless this is deemed necessary in the light of the risk of the product to human, animal or plant health or life;

(c) where the Party requires the use of a unique identification number by economic operators, the Party shall ensure that such numbers are issued to the relevant economic operators without undue delay and on a non-discriminatory basis;

(d) provided it is not misleading, contradictory or confusing in relation to the information required in the importing Party of the goods, the Party shall permit the following: (i) information in other languages in addition to the language required in the importing Party of the goods; (ii) internationally-accepted nomenclatures, pictograms, symbols or graphics; (iii) additional information to that required in the importing Party of the goods; (e) the Party shall accept that labelling, including re-labelling and corrections to labelling, take place, where relevant, in authorised premises (for example, in customs warehouses at the point of import) in the importing Party prior to the distribution and sale of the product as an alternative to labelling in the place of origin, unless such labelling is required to be carried out in the place of origin for reasons of public health or safety; and (f) the Party shall, in cases where it considers that legitimate objectives under the TBT Agreement are not compromised thereby, endeavour to accept non-permanent or detachable labels, or marking or labelling in the accompanying documentation rather than physically attached to the product. 3. Without prejudice to the Parties' rights and obligations under the WTO Agreement, paragraph 2 shall apply to agricultural products, industrial products, and processed agricultural food products including beverages and spirits.

ARTICLE 4.11 Contact Points

The functions of the contact points designated in accordance with Article 13.4 (Enquiries and Contact Points) shall include: (a) monitoring the implementation and administration of this Chapter; (b) promptly addressing any issue that the other Party raises related to the development, adoption, application, or enforcement of standards, technical regulations or conformity assessment procedures; (c) enhancing cooperation in the development and improvement of standards, technical regulations, and conformity assessment procedures; (d) exchanging information on standards, technical regulations, and conformity assessment procedures; (e) facilitating cooperation activities, as appropriate, in accordance with paragraph 2 of Article 4.4 (Joint Cooperation); and (f) arranging the establishment of ad hoc working groups at the request of either Party, in order to explore ways to facilitate trade between the Parties.

ARTICLE 4.12 Final Provisions

1. The Parties may discuss in the Committee on Trade in Goods established pursuant to Article 16.2 (Specialised Committees) any implementing arrangements arising from this Chapter. The Parties may, by decision in that Committee, adopt any implementing measure required to this effect. 2. The Parties have undertaken further commitments on sector-specific non-tariff measures on goods as set out in Annex 4-A and the Appendices pertaining thereto. CHAPTER FIVE SANITARY AND PHYTOSANITARY MEASURES ARTICLE 5.1 Objectives The objectives of this Chapter are: (a) to protect human, animal or plant life or health in the respective territories of the Parties while facilitating trade between the Parties in the area of sanitary and phytosanitary measures (hereinafter referred to as "SPS measures");

(b) to collaborate on the further implementation of the SPS Agreement; and

(c) to provide a means to improve communication, cooperation and resolution of issues related to the implementation of SPS measures affecting trade between the Parties. ARTICLE 5.2 Scope 1. This Chapter applies to all SPS measures of a Party that may, directly or indirectly, affect trade between the Parties. 2. This Chapter shall also apply to collaboration between the Parties on animal welfare matters of mutual interest to the Parties. 3. Nothing in this Chapter shall affect the rights of the Parties under the TBT Agreement with respect to measures not within the scope of this Chapter. ARTICLE 5.3 Definitions For the purposes of this Chapter:

1. The definitions contained in Annex A of the SPS Agreement shall apply.

2. The Parties may agree on other definitions for the application of this Chapter taking into consideration the glossaries and definitions of relevant international organisations, such as the CODEX Alimentarius Commission (hereinafter referred to as "Codex Alimentarius"), the World Organisation for Animal Health (hereinafter referred to as "OIE") and under the International Plant Protection Convention (hereinafter referred to as "IPPC"). ARTICLE 5.4 Rights and Obligations The Parties reaffirm their rights and obligations under the SPS Agreement. ARTICLE 5.5 Competent Authorities The competent authorities of the Parties responsible for the implementation of this Chapter set out in Annex 5-A. The Parties shall notify each other of any change of these competent authorities.

ARTICLE 5.6

General Principles When implementing this Chapter, the Parties: (a) shall ensure consistency of SPS measures with the principles established by Article 3 of the SPS Agreement; (b) will not use SPS measures to create unjustified barriers to trade; (c) shall ensure that procedures established under this Chapter are undertaken and completed without undue delay and that such procedures are not applied in a manner which would constitute an arbitrary or unjustifiable discrimination against the other Party where identical or similar conditions exist; and (d) will neither use the procedures referred to in subparagraph (c) nor any requests for additional information to delay, without scientific and technical justification, access to their respective markets. ARTICLE 5.7 Import Requirements 1. The import requirements of a Party shall apply to the entire territory of the other Party.



2. The exporting Party shall ensure that products exported to the importing Party meet the sanitary and phytosanitary requirements of the importing Party. 3. The importing Party shall ensure that its import requirements are applied to products imported from the exporting Party in a proportional and non-discriminatory manner. 4. Any fees imposed for the procedures on products imported from the exporting Party shall be equitable in relation to any fees charged on like domestic products and shall not be higher than the actual cost of the service. 5. The importing Party shall have the right to carry out import checks on products imported from the exporting Party for the purposes of implementing SPS measures. 6. The import checks carried out on products imported from the exporting Party shall be based on the sanitary and phytosanitary risk associated with such importations. They shall be carried out without undue delay and with minimum effect on trade between the Parties. 7. The importing Party shall make available to the exporting Party, upon request by the latter Party, information about the frequency of import checks carried out on products from the latter Party. The importing Party may change the frequency of physical checks on consignments, as appropriate, as a consequence of (i) verifications, (ii) import checks, or (iii) a mutual agreement between the Parties, including following consultations provided for in this Chapter.

8. In the event that the import checks demonstrate that products do not conform with the relevant import requirements of the importing Party, any action taken by the importing Party should be proportionate to the sanitary and phytosanitary risk associated with the import of the non-compliant product. ARTICLE 5.8 Verifications 1. In order to attain and maintain confidence in the effective implementation of this Chapter, the importing Party shall have the right to carry out verifications at any time, including:

(a) through verification visits to the exporting Party, to verify all or part of the inspection and certification system of the exporting Party's competent authorities, in accordance with the relevant international standards, guidelines and recommendations of the Codex Alimentarius, OIE and IPPC; and (b) by requiring information from the exporting Party about its inspection and certification system and obtaining the results of the controls carried out thereunder. 2. The importing Party shall share with the exporting Party the results and conclusions of the verifications carried out pursuant to paragraph 1. The importing Party may make these results publicly available.

3. If the importing Party decides to carry out a verification visit to the exporting Party, the importing Party shall notify the exporting Party of this verification visit at least sixty calendar days before the verification visit is to be carried out, except in emergency cases or if the Parties agree otherwise. Any modification to such a visit shall be agreed by the Parties. 4. The costs incurred in carrying out a verification of all or part of the other Party's competent authorities' inspection and certification systems and of any inspection of individual establishments, shall be borne by the importing Party. 5. The importing Party shall provide information in writing of a verification to the exporting Party within sixty calendar days. The exporting Party shall have forty-five calendar days to comment on such information. Comments made by the exporting Party shall be attached to and, where appropriate, included in the final outcome document. 6. Notwithstanding paragraph 5, where a significant human, animal or plant life or health risk has been identified during a verification, the importing Party shall inform the exporting Party as quickly as possible and in any case within ten calendar days following the end of the verification. ARTICLE 5.9 Trade Facilitation

1. In cases where the importing Party requires an on-the-spot verification to authorise imports of a certain category or categories of products of animal origin from the exporting Party, the following shall apply:

(a) the verification shall evaluate the exporting Party's inspection and certification system in accordance with Article 5.8 (Verifications) and shall take into consideration any relevant written information provided by the exporting Party upon request; and (b) in case of a satisfactory outcome of the verification of the inspection and certification system, the importing Party shall inform, in writing, the exporting Party of the positive outcome of the verification. In this case, the information provided may include that the importing Party has authorised, or will authorise, imports of specific category or categories of products; or (c) if the outcome of the verification of the inspection and certification systems is not satisfactory, the importing Party shall inform, in writing, the exporting Party of the result of the verification. In this case, the information shall include one of the following: (i) the conditions, including those related to the inspection and certification system of the exporting Party, that still need to be put in place by the exporting Party to allow the importing Party to authorise imports of a specific category or categories of products of animal origin; (ii) a reference to the fact that specific establishments of products of animal origin may be allowed to export to the importing Party upon compliance with the relevant import requirements of Article 5.7 (Import Requirements); or (iii) a statement that the importing Party has not authorised the import of the specific category or categories of products from the exporting Party.

2. In cases where the importing Party has authorised imports of a specific category or categories of products of animal origin referred to in paragraph 1(b), the exporting Party shall inform the importing Party of the list of individual establishments meeting the importing Party's requirements in accordance with, in particular, Article 5.7 (Import Requirements) and Article 5.8 (Verifications). Furthermore: (a) upon request of the exporting Party, the importing Party shall approve individual establishments referred to in paragraph 3 of Annex 5-B which are situated in the territory of the exporting Party, without prior inspection of individual establishments. When requesting the approval by the importing Party, the exporting Party shall provide any information required by the importing Party to guarantee the compliance with the relevant requirements, including those of Article 5.7 (Import Requirements). The approval by the importing Party shall be consistent with the conditions set out in Annex 5-B and it shall be limited to those categories of products for which imports are authorised; (b) upon approval of the individual establishments referred to in subparagraph 2(a), the importing Party shall take the necessary legislative or administrative measures in accordance with its applicable legal and administrative procedures to allow imports within forty calendar days of the receipt of the request of the exporting Party accompanied by the information required by the importing Party to guarantee the compliance with the relevant requirements, including those of Article 5.7 (Import Requirements); and

(c) the importing Party shall notify the exporting Party of its acceptance or rejection of any individual establishments referred to in paragraph 2(a) and, if applicable, the reasons for any rejection.

ARTICLE 5.10 Measures Linked to Animal and Plant Health 1. The Parties recognise the concept of pest- or disease-free areas and areas of low pest or disease prevalence, in accordance with the SPS Agreement, OIE and IPPC standards, guidelines or recommendations. The SPS Committee referred to in Article 5.15 (Committee on Sanitary and Phytosanitary Measures) may define further details for the procedure for the recognition of such areas, including procedures for the recognition of such areas when there has been an outbreak, taking into account any relevant SPS Agreement, OIE and IPPC standards, guidelines or recommendations. 2. When determining pest- or disease-free areas and areas of low pest or disease prevalence, the Parties shall consider factors such as geographical location, ecosystems, epidemiological surveillance, and the effectiveness of sanitary or phytosanitary controls in such areas. 3. The Parties shall establish close cooperation on the determination of pest- or disease-free areas and areas of low pest and disease prevalence with the objective of attaining confidence in the procedures followed by the other Party for the determination of such areas. When accepting the determination of such areas made by the exporting Party, the importing Party shall in principle base its determination of the animal or plant health status of the exporting Party or parts thereof on the information provided by the exporting Party in accordance with the SPS Agreement, OIE and IPPC standards, guidelines or recommendations.

4. If the importing Party does not accept the determination made by the exporting Party, it shall explain the reasons and shall be ready to enter into consultations. 5. The exporting Party claiming that areas within their territories are pest- or disease-free areas or areas of low pest or disease prevalence shall provide relevant evidence in order to objectively demonstrate to the importing Party that such areas are, and are likely to remain, pest- or disease-free areas or areas of low pest or disease prevalence, as the case may be. For these purposes, reasonable access shall be given, upon request, to the importing Party for inspection, testing and other relevant procedures. 6. The Parties recognise the principle of compartmentalisation of the OIE and pest-free production sites of the IPPC. The SPS Committee referred to in Article 5.15 (Committee on Sanitary and Phytosanitary Measures) will assess any OIE and IPPC recommendations that may be issued on this matter in the future and may issue recommendations accordingly.

ARTICLE 5.11 Transparency and Exchange of Information 1. The Parties shall: (a) pursue transparency as regards SPS measures applicable to trade and, in particular, to those of Article 5.7 (Import Requirements) applied to imports from the other Party;

(b) enhance mutual understanding of each Party's SPS measures and their application; (c) exchange information on matters related to the development and application of SPS measures, including the progress on new available scientific evidence, that affect, or may affect, trade between the Parties with a view to minimising their negative trade effects; (d) upon request of a Party, communicate the import requirements that apply for the import of specific products within fifteen calendar days; and (e) upon request of a Party, communicate progress on the application for the authorisation of specific products within fifteen calendar days. 2. The contact points responsible for the information pursuant to paragraph 1 are those that are designated by the Parties in accordance with paragraph 1 of Article 13.4 (Enquiries and Contact Points). Information shall be sent by post, fax or e-mail. Information by e-mail may be signed electronically and shall only be sent between the contact points. 3. When the information pursuant to paragraph 1 has been made available by notification to the WTO in accordance with its relevant rules and procedures or when the above information has been made available on the official, publicly accessible and fee-free web-sites of the Parties, the information exchange shall be considered to have taken place.

4. All notifications under this Chapter shall be made to the contact points referred to under paragraph 2.

ARTICLE 5.12 Consultations 1. Each Party shall notify in writing to the other Party within two calendar days, of any serious or significant human, animal or plant life or health risk, including any food emergencies. 2. Where a Party has serious concerns regarding a risk to human, animal or plant life or health, affecting commodities for which trade takes place, consultations regarding the situation shall, upon request, take place as soon as possible. In this case, each Party shall endeavour to provide in due time all necessary information to avoid disruption in trade. 3. Consultations referred to in paragraph 2 of this Article may be held by e-mail, video or telephone conference. The requesting Party shall ensure the preparation of the minutes of the consultation. ARTICLE 5.13 Emergency Measures 1 In case of serious human, animal or plant life or health risk, the importing Party may take, without previous notification, measures necessary to protect human, animal or plant life or health. For consignments in transport between the Parties, the importing Party shall consider the most suitable and proportional solution in order to avoid unnecessary disruptions to trade.



2. The Party taking the measures shall inform the other Party as soon as possible and in any case no later than twenty-four hours after the adoption of the measure. Either Party may request any information related to the sanitary and phytosanitary situation and any measures adopted. The other Party shall answer as soon as the requested information is available. 3. Upon request of either Party and in accordance with the provisions of Article 5.12 (Consultations) the Parties shall hold consultations regarding the situation within fifteen calendar days of the notification. These consultations shall be carried out in order to avoid unnecessary disruptions to trade. The Parties may consider options for the facilitation of the implementation or the replacement of the measures. ARTICLE 5.14 Equivalence 1. The Parties may recognise equivalence of an individual measure and/or groups of measures and/or systems applicable to a sector or part of a sector in accordance with paragraphs 4 to 7. The recognition of equivalence shall be applied to trade between the Parties in animals and animal products, plants and plant products, or as appropriate to related goods. 2. Where equivalence has not been recognised, trade shall take place under the conditions required by the importing Party to meet its appropriate level of protection. 3. The recognition of equivalence requires an assessment and acceptance of:

(a) existing SPS measures in legislation, standards and procedures, including controls related to inspection and certification systems to ensure that the SPS measures of the exporting Party and the importing Party are met; (b) the documented structure of the competent authorities, their powers, their chain of command, their modus operandi and the resources available to them; and (c) the performance of the competent authority in relation to the control programmes and assurances.

4. In their assessment, the Parties shall take account of experience already acquired. 5. The importing Party shall accept the sanitary or phytosanitary measure of the exporting Party as equivalent if the exporting Party objectively demonstrates that its measure achieves the importing Party's appropriate level of protection. For this purpose, reasonable access shall be given, upon request, to the importing Party for inspection, testing and other relevant procedures. 6. The Parties will take into account guidance of the Codex Alimentarius, OIE, IPPC and the WTO SPS Committee in recognising equivalence. 7. Furthermore, where equivalence has been recognised, the Parties may agree on a simplified model for official sanitary or phytosanitary certificates necessary for each consignment of animals and animal products, plants and plant products, or other related goods intended for importation.

ARTICLE 5.15 Committee on Sanitary and Phytosanitary Measures 1. The Committee on Sanitary and Phytosanitary Measures (hereinafter referred to as the "SPS Committee") established pursuant to Article 16.2 (Specialised Committees) shall include representatives of the competent authorities of the Parties. 2. The SPS Committee shall meet within one year of the entry into force of this Agreement. Thereafter it shall meet at least once a year or as agreed by the Parties. The SPS Committee shall establish its rules of procedure at its first meeting. It shall meet in person, telephone conference, video-conference, or through any other means, as agreed by the Parties. 3. The SPS Committee may agree to establish technical working groups consisting of experts of the Parties, which shall identify and address technical and scientific issues arising under this Chapter and explore opportunities for further collaboration on SPS matters of mutual interest. When additional expertise is needed, the membership of these groups may include persons other than representatives of the Parties.

4. The SPS Committee may address any matter related to the effective functioning of this Chapter. In particular, it shall have the following responsibilities and functions: (a) develop the necessary procedures or arrangements for the implementation of this Chapter, including its Annexes;

(b) monitor the implementation of this Chapter; and (c) provide a forum for discussion of problems arising from the application of certain SPS measures with a view to reaching mutually acceptable solutions. In this connection, the SPS Committee shall be convened as a matter of urgency, at the request of a Party, so as to carry out consultations. Such consultations are without prejudice to the rights and obligations of the Parties under Chapter Fourteen (Dispute Settlement) and Chapter Fifteen (Mediation Mechanism). 5. The SPS Committee will exchange information, expertise and experiences in the field of animal welfare in order to promote the collaboration on animal welfare between the Parties. 6. The Parties may, by decision in the SPS Committee, adopt recommendations and decisions related to the authorisation of imports, exchange of information, transparency, recognition of regionalisation, equivalency and alternative measures, and any other matter referred to under paragraphs 4 and 5. ARTICLE 5.16 Technical Consultations 1. Where a Party considers that a measure of the other Party is or might be contrary to the obligations under this Chapter and causes or may cause an unjustified disruption to trade, it may request technical consultations in the SPS Committee with a view to reaching mutually acceptable solutions. The competent authorities set out in Annex 5-A will facilitate these consultations.

2. Technical consultations in the SPS Committee shall be deemed concluded within thirty days following the date of submission of the request, unless the consulting Parties agree to continue with the consultations. The technical consultations may be made via telephone conference, video-conference, or any other mechanism agreed by the Parties.

CHAPTER SIX CUSTOMS AND TRADE FACILITATION ARTICLE 6.1 Objectives 1. The Parties recognise the importance of customs and trade facilitation matters in the evolving global trading environment. The Parties agree to reinforce cooperation in this area with a view to ensuring that the relevant legislation and procedures, as well as the administrative capacity of the relevant administrations, fulfil the objectives of promoting trade facilitation while ensuring effective customs control. 2. To this end, the Parties agree that legislation shall be non-discriminatory and that customs procedures shall be based upon the use of modern methods and effective controls to combat fraud and to protect legitimate trade.

3. The Parties recognise that legitimate public policy objectives, including in relation to security, safety and combating fraud, shall not be compromised in any way. ARTICLE 6.2

Principles 1. The Parties agree that their respective customs provisions and procedures shall be based upon: (a) international instruments and standards applicable in the area of customs and trade, which the respective Parties have accepted, including the substantive elements of the Revised Kyoto Convention on the Simplification and Harmonisation of Customs Procedures, the International Convention on the Harmonized Commodity Description and Coding System, and the Framework of Standards to Secure and Facilitate Global Trade (hereinafter referred to as "SAFE Framework") of the World Customs Organization (hereinafter referred to as "WCO"); (b) the protection of legitimate trade through effective enforcement and compliance of legislative requirements; (c) legislation that avoids unnecessary or discriminatory burdens on economic operators, that provides for further trade facilitation for economic operators with high levels of compliance, and that ensures safeguards against fraud and illicit or damageable activities; and

(d) rules that ensure that any penalty imposed for breaches of customs regulations or procedural requirements is proportionate and non-discriminatory and that their application shall not unduly delay the release of goods. 2. In order to improve working methods, as well as to ensure non-discrimination, transparency, efficiency, integrity and accountability of operations, the Parties shall: (a) simplify requirements and formalities wherever possible with respect to the rapid release and clearance of goods; and (b) work towards the further simplification and standardisation of data and documentation required by customs and other agencies. ARTICLE 6.3

Customs Cooperation 1. The Parties shall cooperate on customs matters between their respective authorities in order to ensure that the objectives set out in Article 6.1 (Objectives) are attained. 2. In order to enhance cooperation on customs matters, the Parties shall, inter alia: (a) exchange information concerning their respective customs legislation, its implementation, and customs procedures, particularly in the following areas:

(i) simplification and modernisation of customs procedures; (ii) border enforcement of intellectual property rights by the customs authorities; (iii) transit movements and transhipment; and (iv) relations with the business community; (b) consider developing joint initiatives relating to import, export and other customs procedures, as well as towards ensuring an effective service to the business community; (c) work together on customs-related aspects of securing and facilitating the international trade supply chain in accordance with the SAFE Framework;

(d) establish, where appropriate, mutual recognition of their respective risk management techniques, risk standards, security controls and trade partnership programmes, including aspects such as data transmission and mutually agreed benefits; and (e) strengthen coordination in international organisations such as the