Kiri

EN EN

EUROPEAN COMMISSION

Brussels, 3.9.2025

COM(2025) 357 final

ANNEX 10

ANNEX

to the

Proposal for a Council Decision

on the conclusion, on behalf of the European Union, of the Partnership Agreement

between the European Union and its Member States, of the one part, and the Common

Market of the South, the Argentine Republic, the Federative Republic of Brazil, the

Republic of Paraguay and the Oriental Republic of Uruguay, of the other part

& /en 1

PROTOCOL ON COOPERATION

ARTICLE 1

General principles

1. The Parties recall the establishment of a free trade area pursuant to Article 9.1 of the

Partnership Agreement between the European Union and its Member States, of the one Part, and the

Common Market of the South, the Argentine Republic, the Federative Republic of Brazil, the

Republic of Paraguay and the Oriental Republic of Uruguay, of the other Part (hereinafter referred

to as "the EU–MERCOSUR Partnership Agreement"), with the objectives set out in Article 9.2 of

the EU–MERCOSUR Partnership Agreement, which will contribute to increasing the overall

income and prosperity in both regions and to reducing inequalities, in line with the United Nations

Sustainable Development Goals.

2. The Parties are committed to a cooperation partnership that will contribute to peace and

prosperity, based on respect, trust, and shared values and interests, jointly addressing challenges and

seizing opportunities arising from the EU–MERCOSUR Partnership Agreement. Accordingly, the

cooperation partnerships addressed in this Protocol are inspired by a vision whereby both Parties

jointly define the priorities, design and objectives pursued.

& /en 2

3. The Parties recognise the need to facilitate the adaptation of MERCOSUR economic actors,

particularly micro, small and medium-sized enterprises and entrepreneurs (hereinafter referred to as

"SMEs"), women, smallholding farmers, indigenous peoples and local and traditional communities,

to the new economic and trade environment generated by the establishment of the free-trade area,

enabling them to gain competitiveness in the MERCOSUR and the EU markets and reap the

benefits of the EU–MERCOSUR Partnership Agreement.

4. Therefore, in complement to the cooperation provisions enshrined in Article 4.2 of

the EU–MERCOSUR Partnership Agreement, the Parties reiterate their commitment

to engage in cooperation partnerships with the chief purpose of facilitating the

implementation of the EU–MERCOSUR Partnership Agreement, with a particular emphasis

on its Part III, by contributing to their ability to fully take advantage of the possibilities brought

about by the EU–MERCOSUR Partnership Agreement and addressing potential adverse impacts on

vulnerable economic sectors and industries, underlining the need to take into account the specific

challenges of landlocked developing countries.

5. The cooperation envisaged under this Protocol may comprise activities jointly involving all

Signatory MERCOSUR States or one or several individual Signatory MERCOSUR States over

specific sectors and segments, including their SMEs. The Parties will make full use of the

possibilities offered inter alia by the EU-LAC Global Gateway Investment Agenda.

6. The Parties agree that MERCOSUR and the Signatory MERCOSUR States can benefit from

all types of resources provided under this Protocol taking into account, among others, the specific

challenges of landlocked developing countries to ensure market access and equal opportunities to

benefit under the EU–MERCOSUR Partnership Agreement.

& /en 3

ARTICLE 2

Financial mechanisms

EU financial support may take the form of grants, loans, guarantees and technical cooperation and

could be integrated with resources of MERCOSUR and the Signatory MERCOSUR States as well

as other financial resources from national, regional and international financial institutions in order

to further pursue the objectives of the EU–MERCOSUR Partnership Agreement. The European

Union will also seek to establish a specific MERCOSUR programme as a main channel to

streamline cooperation under the EU–MERCOSUR Partnership Agreement and can also make use

of existing programmes and instruments to channel assistance to MERCOSUR and the Signatory

MERCOSUR States, using both bilateral and regional programmes, loans and budgetary guarantees

to development finance institutions. In line with the Team Europe Initiative of the European

Commission, support by the European Union may include contributions from Member States and

not only from the European Union budget. Given the new economic and trade conditions that could

emanate from the EU–MERCOSUR Partnership Agreement, financial support by the European

Union will include new resources not available at present under other programmes, to be

preferentially channelled through a specific MERCOSUR programme as outlined above.

& /en 4

ARTICLE 3

Monitoring and implementation

1. The Parties recall that, pursuant to Article 2.4(6) of the EU–MERCOSUR Partnership

Agreement, a Subcommittee on International Cooperation and Development is established to

promote, coordinate and supervise the implementation of cooperation activities in the areas referred

to in Part II of the EU–MERCOSUR Partnership Agreement, as well as the follow up, monitoring

and evaluation of those cooperation initiatives.

2. In addition to the tasks provided for in Article 2.4 of the EU–MERCOSUR Partnership

Agreement, the Subcommittee on International Cooperation and Development shall steer the

direction, define the priorities and shape the design of the partnership programmes of the joint work

on cooperation established in this Protocol, as well as monitor regularly the availability of funds for

the activities referred herein. It may also submit recommendations to the Joint Committee referred

to in Article 2.3 of the EU–MERCOSUR Partnership Agreement.

3. For the purposes of planning the effective implementation of cooperation under

the EU–MERCOSUR Partnership Agreement, the Parties agree to start discussing, in the

Subcommittee on International Cooperation and Development, ongoing and planned

cooperation actions, within one year of the entry into force or start of provisional application of

the EU–MERCOSUR Partnership Agreement. Also within this period, the Parties, acting in the

framework of the Subcommittee on International Cooperation and Development, will agree on the

process for approval of projects that will fall under the scope of this Protocol.

ET ET

EUROOPA KOMISJON

Brüssel, 3.9.2025

COM(2025) 357 final

ANNEX 10

LISA

järgmise dokumendi juurde:

Ettepanek: Nõukogu otsus

ühelt poolt Euroopa Liidu ja selle liikmesriikide ning teiselt poolt Lõuna-Ameerika

lõunaosa ühisturu, Argentina Vabariigi, Brasiilia Liitvabariigi, Paraguay Vabariigi ja

Uruguay Idavabariigi vahelise partnerluslepingu Euroopa Liidu nimel sõlmimise kohta

& /et 1

KOOSTÖÖPROTOKOLL

ARTIKKEL 1

Üldpõhimõtted

1. Lepinguosalised tuletavad meelde, et kooskõlas ühelt poolt Euroopa Liidu ja selle

liikmesriikide ning teiselt poolt Lõuna-Ameerika lõunaosa ühisturu, Argentina Vabariigi, Brasiilia

Liitvabariigi, Paraguay Vabariigi ja Uruguay Idavabariigi vahelise partnerluslepingu (edaspidi „ELi

ja Mercosuri partnerlusleping“) artikliga 9.1 on loodud vabakaubanduspiirkond, mille eesmärgid on

sätestatud ELi ja Mercosuri partnerluslepingu artiklis 9.2; vabakaubanduspiirkond aitab suurendada

mõlema piirkonna üldist sissetulekut ja jõukust ning vähendada ebavõrdsust kooskõlas ÜRO

kestliku arengu eesmärkidega.

2. Lepinguosalised on pühendunud koostööpartnerlusele, mis aitab kaasa rahule ja heaolule,

tuginedes austusele, usaldusele ning ühistele väärtustele ja huvidele, käsitledes ühiselt probleeme ja

kasutades ära ELi ja Mercosuri partnerluslepingust tulenevaid võimalusi. Sellest tulenevalt lähtuvad

käesolevas protokollis käsitletud koostööpartnerlused visioonist, mille kohaselt mõlemad

lepinguosalised määravad ühiselt kindlaks prioriteedid, struktuuri ja taotletavad eesmärgid.

& /et 2

3. Lepinguosalised tunnistavad vajadust hõlbustada Mercosuri majandustegevuses osalejate,

eelkõige mikro-, väikeste ja keskmise suurusega ettevõtjate ja üksikisikust ettevõtjate (edaspidi

„VKEd“), naiste, väikemaaomanike, põlisrahvaste ning kohalike ja traditsiooniliste kogukondade

kohanemist vabakaubanduspiirkonnaga loodud uue majandus- ja kaubanduskeskkonnaga,

võimaldades neil saavutada konkurentsivõime Mercosuri ja ELi turgudel ning saada kasu ELi ja

Mercosuri partnerluslepingust.

4. Seetõttu, lisaks ELi ja Mercosuri partnerluslepingu artikli 4 lõikes 2 sätestatud koostöösätetele

kordavad osalised oma pühendumust koostööpartnerlustele, mille peamine eesmärk on hõlbustada

ELi ja Mercosuri partnerluslepingu rakendamist, pöörates erilist tähelepanu selle III osale, aidates

riikidel täielikult ära kasutada ELi ja Mercosuri partnerluslepingu pakutavaid võimalusi ning

tegeleda võimaliku kahjuliku mõjuga haavatavatele majandussektoritele ja tööstusharudele,

rõhutades vajadust võtta arvesse merepiirita arenguriikide eriomaseid probleeme.

5. Käesoleva protokolliga ette nähtud koostöö võib hõlmata tegevusi, kuhu on kaasatud ühiselt

kõik lepingule alla kirjutanud Mercosuri riigid või üks või mitu lepingule alla kirjutanud Mercosuri

riiki konkreetsetes sektorites ja segmentides, sealhulgas nende VKEsid. Lepinguosalised kasutavad

täielikult ära võimalusi, mida pakub muu hulgas strateegia „Global Gateway“ ELi – Ladina-

Ameerika ja Kariibi piirkonna investeerimiskava.

6. Lepinguosalised lepivad kokku, et Mercosur ja lepingule alla kirjutanud Mercosuri riigid

võivad kasutada kõiki käesoleva protokolli alusel antavaid vahendeid, võttes muu hulgas arvesse

merepiirita arenguriikide eriomaseid probleeme, et tagada turulepääs ning võrdsed võimalused

saada kasu ELi ja Mercosuri partnerluslepingust.

& /et 3

ARTIKKEL 2

Finantsmehhanismid

ELi rahalist toetust võib anda toetuste, laenude, tagatiste ja tehnilise koostöö vormis ning selle võiks

ühendada Mercosuri ja lepingule alla kirjutanud Mercosuri riikide vahenditega ning muude riiklike,

piirkondlike ja rahvusvaheliste finantseerimisasutuste rahaliste vahenditega, et jätkata ELi ja

Mercosuri partnerluslepingu eesmärkide saavutamist. Euroopa Liit püüab luua ka spetsiaalse

Mercosuri programmi, mis oleks peamine vahend koostöö ühtlustamiseks ELi ja Mercosuri

partnerluslepingu raames, ning võib kasutada ka olemasolevaid programme ja vahendeid, et suunata

abi Mercosurile ja lepingule alla kirjutanud Mercosuri riikidele, kasutades nii kahepoolseid kui ka

piirkondlikke programme, laene ja eelarvelisi tagatisi arengut rahastavatele asutustele. Kooskõlas

Euroopa Komisjoni Euroopa tiimi algatusega võib Euroopa Liidu toetus hõlmata ka liikmesriikide

panust, mitte ainult Euroopa Liidu eelarvest eraldatavaid vahendeid. Võttes arvesse uusi majandus-

ja kaubandustingimusi, mis võivad tuleneda ELi ja Mercosuri partnerluslepingust, hõlmab Euroopa

Liidu rahaline toetus uusi vahendeid, mis ei ole praegu muude programmide raames kättesaadavad

ja mida eraldatakse eelistatult konkreetse Mercosuri programmi kaudu, nagu on kirjeldatud eespool.

& /et 4

ARTIKKEL 3

Seire ja rakendamine

1. Lepinguosalised tuletavad meelde, et ELi ja Mercosuri partnerluslepingu artikli 2.4 lõike 6

kohaselt luuakse rahvusvahelise koostöö ja arengu allkomitee, et edendada, koordineerida ja

kontrollida koostöömeetmete rakendamist ELi ja Mercosuri partnerluslepingu II osas osutatud

valdkondades ning nende koostööalgatuste järelmeetmeid, järelevalvet ja hindamist.

2. Lisaks ELi ja Mercosuri partnerluslepingu artiklis 2.4 sätestatud ülesannetele suunab

rahvusvahelise koostöö ja arengu allkomitee käesolevas protokollis sätestatud koostööd, määrab

kindlaks selle prioriteedid ja kujundab partnerlusprogrammide ülesehitust ning jälgib korrapäraselt

rahaliste vahendite kättesaadavust käesolevas protokollis osutatud tegevuste jaoks. Samuti võib ta

esitada soovitusi ELi ja Mercosuri partnerluslepingu artiklis 2.3 osutatud ühiskomiteele.

3. ELi ja Mercosuri partnerluslepingu alusel toimuva koostöö tulemuslikuks rakendamiseks

lepivad lepinguosalised kokku, et alustavad rahvusvahelise koostöö ja arengu allkomitees

käimasolevate ja kavandatavate koostöömeetmete arutamist ühe aasta jooksul pärast ELi ja

Mercosuri partnerluslepingu jõustumist või selle ajutise kohaldamise algust. Selle aja jooksul

lepivad lepinguosalised rahvusvahelise koostöö ja arengu allkomitee raames kokku ka käesoleva

protokolli kohaldamisalasse kuuluvate projektide heakskiitmise menetluses.

EN EN

EUROPEAN COMMISSION

Brussels, 3.9.2025

COM(2025) 357 final

ANNEX 1

ANNEX

to the

Proposal for a Council Decision

on the conclusion, on behalf of the European Union, of the Partnership Agreement

between the European Union and its Member States, of the one part, and the Common

Market of the South, the Argentine Republic, the Federative Republic of Brazil, the

Republic of Paraguay and the Oriental Republic of Uruguay, of the other part

& /en 1

PARTNERSHIP AGREEMENT BETWEEN THE EUROPEAN UNION AND ITS MEMBER

STATES, OF THE ONE PART, AND THE COMMON MARKET OF THE SOUTH, THE

ARGENTINE REPUBLIC, THE FEDERATIVE REPUBLIC OF BRAZIL, THE REPUBLIC OF

PARAGUAY AND THE ORIENTAL REPUBLIC OF URUGUAY, OF THE OTHER PART

THE KINGDOM OF BELGIUM,

THE REPUBLIC OF BULGARIA,

THE CZECH REPUBLIC,

THE KINGDOM OF DENMARK,

THE FEDERAL REPUBLIC OF GERMANY,

THE REPUBLIC OF ESTONIA,

IRELAND,

THE HELLENIC REPUBLIC,

THE KINGDOM OF SPAIN,

THE FRENCH REPUBLIC,

THE REPUBLIC OF CROATIA,

& /en 2

THE ITALIAN REPUBLIC,

THE REPUBLIC OF CYPRUS,

THE REPUBLIC OF LATVIA,

THE REPUBLIC OF LITHUANIA,

THE GRAND DUCHY OF LUXEMBOURG,

HUNGARY,

THE REPUBLIC OF MALTA,

THE KINGDOM OF THE NETHERLANDS,

THE REPUBLIC OF AUSTRIA,

THE REPUBLIC OF POLAND,

THE PORTUGUESE REPUBLIC,

ROMANIA,

THE REPUBLIC OF SLOVENIA,

THE SLOVAK REPUBLIC,

& /en 3

THE REPUBLIC OF FINLAND,

THE KINGDOM OF SWEDEN,

Contracting Parties to the Treaty on European Union and the Treaty on the Functioning of the

European Union, hereinafter referred to as "the Member States",

and

THE EUROPEAN UNION, hereinafter referred to as "the Union" or "the EU",

of the one part,

AND

THE ARGENTINE REPUBLIC,

THE FEDERATIVE REPUBLIC OF BRAZIL,

THE REPUBLIC OF PARAGUAY,

THE ORIENTAL REPUBLIC OF URUGUAY,

State Parties to the Common Market of the South signatories of this Agreement, hereinafter referred

to as "Signatory MERCOSUR States",

and

& /en 4

THE COMMON MARKET OF THE SOUTH, hereinafter referred to as "MERCOSUR",

of the other part,

hereinafter jointly referred to as "the Parties",

for the purposes of this Agreement MERCOSUR refers to the Argentine Republic, the Federative

Republic of Brazil, the Republic of Paraguay and the Oriental Republic of Uruguay,

CONSIDERING the deep historical, cultural, political and economic ties that unite their peoples

and inspired by their common values;

CONSIDERING that MERCOSUR and the European Union wish to reinforce those ties and

intensify their relations on the basis of dialogue and cooperation, with a view to establishing a

strategic partnership;

RECALLING the Parties' firm commitment to the principles of international law, to the Charter of

the United Nations ("UN"), to democracy, the rule of law and human rights and to fundamental

freedoms;

CONSIDERING that respect for democratic principles and human rights as laid down in the

Universal Declaration of Human Rights and other relevant international human rights instruments,

for international humanitarian law, and for the principles of the rule of law underpins the internal

and international policies of the Parties and constitutes an essential element of this Agreement;

REAFFIRMING their support for democratic institutions and values, which are indispensable for

the development of their respective integration processes and their mutual relationship;

& /en 5

MOTIVATED to contribute to the reinforcement of multilateralism, to international peace and

security and to the promotion of a fair and democratic international order;

RECOGNISING the important contribution to disarmament and non-proliferation of the

proclamation of Latin America and the Caribbean as a zone of peace, free of nuclear weapons, in

accordance to the Treaty of Tlatelolco and its additional protocols, and reaffirming their

commitments to promote nuclear disarmament;

REAFFIRMING the values, purposes and principles of the Charter of the United Nations, signed

on 26 June 1945, in San Francisco, at the conclusion of the United Nations Conference on

International Organization ("the UN Charter");

REAFFIRMING the shared aim of promoting economic and social development which underpins

this Agreement, and considering that market liberalisation should be complemented by the

promotion of social development and the reduction of inequalities through adequate access to

employment, education and health, and the elimination of extreme poverty;

REAFFIRMING their commitment to strengthen and develop the multilateral trading system

through the application of transparent, equitable and non-discriminatory rules, with a view to the

promotion of increasingly dynamic and open international trade which ensures the increased

participation of developing countries in international trade, investment and technology flows;

REAFFIRMING their commitment to promote international trade in such a way as to contribute to

sustainable development in its economic, social and environment dimensions, involving all relevant

stakeholders, including civil society and the private sector, and to implement this agreement in a

manner consistent with their respective laws and international commitments on labour and

environmental matters;

& /en 6

BUILDING UPON the rights and obligations assumed by the Parties as members of the World

Trade Organization ("WTO");

DESIRING to improve the competitiveness of their enterprises, by providing them with a

predictable legal framework for their trade and investment relations, with special attention to micro,

small and medium enterprises;

REAFFIRMING the need to promote the respect of internationally recognised guidelines and

principles of corporate social responsibility and responsible business conduct, including the

Organisation for Economic Co-operation and Development ("OECD") Guidelines for Multinational

Enterprises, amongst enterprises operating in their territories;

CONSIDERING that the strengthening of the multilateral trading system can be achieved through

multilateral trade negotiations which aim at ambitious, comprehensive and balanced results, the

promotion of economic development and the improvement of human welfare;

TAKING INTO ACCOUNT that the Parties consider regional integration and open regionalism to

be important instruments for economic and social development which enhance the international

integration of their economies, promote closer ties between their peoples and contribute to

international stability;

WELCOMING the adoption of the 2030 Agenda for Sustainable Development document

"Transforming our World: the 2030 Agenda for Sustainable Development" adopted by the United

Nations General Assembly on 25 September 2015 (hereinafter referred to as "the 2030 Agenda")

and the Paris Agreement adopted under the United Nations Framework Convention on Climate

Change, done at Paris on 12 December 2015 (hereinafter referred to as the "Paris Agreement") and

calling for their swift implementation;

& /en 7

CONSCIOUS of the need to promote the growth and development of the Parties and to reduce

existing disparities, giving special attention to the needs and difficulties faced by Paraguay as a

landlocked country;

RECOGNISING the long history of migration between European Union and MERCOSUR

countries, and its positive contribution to their relationship as well as to their social, cultural and

economic development;

BEARING IN MIND the internationally agreed provisions on special and differential treatment for

developing countries;

RECOGNISING that this Agreement preserves the right of the Parties to regulate within their

territories in conformity with their internal laws and regulations as well as the Parties' flexibility to

achieve legitimate policy objectives, such as those concerning public health, safety, the

environment, education, public morals and the promotion and protection of cultural diversity;

REAFFIRMING the Parties' right to exploit their natural resources in accordance with their own

environmental policies, and sustainable development goals;

BEARING IN MIND the Interregional Framework Cooperation Agreement between the European

Community and its Member States, of the one part, and the Southern Common Market and its Party

States, of the other part, signed in Madrid on 15 December 1995, as well as its annexed Joint

Declaration on political dialogue and the purpose of establishing a partnership based on reinforced

political dialogue, trade liberalisation, the promotion of investment and the deepening of

cooperation;

CONSIDERING that cooperation between the European Union and MERCOSUR is implemented

through a variety of instruments;

& /en 8

RECALLING the decision of the meeting of Heads of State and Government from MERCOSUR

and the European Union in June 1999 in Rio de Janeiro to attach renewed priority to their relations

in the political, economic, trade, cultural and cooperation fields, aiming at building a deeper and

fuller partnership between both regions, which should be based on democracy, sustainable

development and economic growth with social justice;

REAFFIRMING their commitment to further strengthen, liberalise and diversify their trade and

investment relations;

LOOKING FORWARD, in this context, to increasing their trade and investment relations through

the establishment of a free trade area in conformity with General Agreement on Tariffs and

Trade 1994 and WTO rules;

WILLING to strengthen cooperation between the Parties, on the basis of an open and permanent

dialogue in all areas of mutual interest, in particular in the political, economic, commercial,

financial, legal and judicial, freedom and security, scientific and technological, social and cultural

fields;

CONSCIOUS of the importance of involving civil society in the context of the partnership between

the Parties;

CONSCIOUS, that, in order to intensify their relationship in all areas of common interest, it is

essential to bring the existing political dialogue between the Parties to a new stage;

CONSIDERING the specific regional integration experiences of the Parties, from which they can

mutually benefit according to their own needs;

& /en 9

REAFFIRMING the importance of their shared principles and values in the field of social

development;

CONSIDERING the importance of cultural dialogue as a means to achieve better mutual

understanding between the Parties, to promote cultural diversity and to foster cultural links between

their citizens;

NOTING that, in the event that the Parties decide, within the framework of this Agreement, to enter

into specific agreements in the area of freedom, security and justice which may be concluded by the

European Union pursuant to Title V of Part Three of the Treaty on the Functioning of the European

Union, the provisions of such future agreements would not bind Ireland unless the European Union,

simultaneously with Ireland as regards its respective previous bilateral relations, notifies

MERCOSUR that Ireland has become bound by such agreements as part of the European Union in

accordance with Protocol No 21 on the position of Ireland in respect of the area of freedom, security

and justice, annexed to the Treaty on European Union and to the Treaty on the Functioning of the

European Union; noting that any subsequent internal measures of the European Union which may

be adopted pursuant to Title V of Part three of the Treaty on the Functioning of the European Union

to implement this Agreement would not bind Ireland, unless it has notified its wish to take part in

such measures or accept them in accordance with Protocol No 21; also noting that such future

agreements or subsequent internal measures of the European Union would fall within Protocol

No 22 on the position of Denmark, annexed to the Treaty on European Union and the Treaty on the

Functioning of the European Union;

RECOGNISING the differences in economic and social development between and within the

Parties;

HAVE AGREED AS FOLLOWS:

& /en 10

PART I

GENERAL PRINCIPLES AND INSTITUTIONAL FRAMEWORK

CHAPTER 1

INITIAL PROVISIONS

ARTICLE 1.1

General definitions

For the purposes of this Agreement:

(a) "1995 Interregional Framework Cooperation Agreement" means the Interregional Framework

Cooperation Agreement between the European Community and its Member States, of the one

part, and the Southern Common Market and its Party States, of the other part, signed in

Madrid on 15 December 1995;

(b) "Interim Trade Agreement" means the Interim Agreement on Trade between the European

Union, of the one part, and the Common Market of the South, the Argentine Republic, the

Federative Republic of Brazil, the Republic of Paraguay and the Oriental Republic of

Uruguay, of the other part, to be concluded;

(c) "SMEs" means small and medium-sized enterprises, which includes micro, small and

medium-sized enterprises and entrepreneurs;

& /en 11

(d) "third country" means a country or territory outside the territorial scope of application of this

Agreement;

(e) "UNCLOS" means the United Nations Convention on the Law of the Sea, done at Montego

Bay on 10 December 1982; and

(f) "WTO" means the World Trade Organization.

ARTICLE 1.2

General principles

1. Respect for democratic principles, human rights and fundamental freedoms as laid down in

the Universal Declaration of Human Rights and other international human rights instruments to

which they are party, as well as for the principles of the rule of law underpins the internal and

international policies of the Parties and constitutes an essential element of this Agreement.

2. The Parties confirm their strong commitment to the shared principles and objectives as

expressed in the UN Charter. The promotion of sustainable economic and social development, as

well as the equitable distribution of the benefits of this Agreement, are among the guiding principles

for the implementation of this Agreement.

3. The Parties reaffirm their attachment to the principles of good governance, including

principles such as governmental transparency and the fight against corruption, ethical and

accountable government, independence of the judiciary and the protection of the rights of

minorities.

& /en 12

ARTICLE 1.3

Scope

This Agreement establishes a partnership between the Parties based on shared values, including

reciprocity, and common interest. It shall strengthen the partnership between the EU Party and the

MERCOSUR Party and lead to a strategic relationship in the political, cooperation and trade fields,

as well as other areas to be agreed upon.

ARTICLE 1.4

General objectives

This Agreement provides for:

(a) an institutional framework which forms the basis of the partnership;

(b) the enhancement of political dialogue through new institutional mechanisms;

(c) cooperation between the Parties aiming at contributing to the achievement of the general

objectives of this Agreement by taking advantage of existing or future innovative cooperation

instruments that are capable of providing added value to the relationship; and

(d) the expansion and diversification of the Parties' biregional trade relations and the specific

objectives and provisions set out in Part III of this Agreement, which should contribute to

higher economic growth, the gradual improvement of the quality of life in both regions and to

the better integration of both regions into the world economy.

& /en 13

CHAPTER 2

INSTITUTIONAL FRAMEWORK

ARTICLE 2.1

Summit

1. The highest level of political and policy dialogue between the EU Party and the MERCOSUR

Party shall be at summit level. Summits shall be held as necessary and as mutually agreed.

2. The Summits shall provide the opportunity to evaluate progress in the implementation of this

Agreement, set out the objectives for its future evolution and discuss other topics of common

interest.

ARTICLE 2.2

Joint Council

1. A Joint Council is hereby established to oversee the fulfilment of the objectives of this

Agreement and supervise its implementation. The Joint Council shall address the matters covered

by this Agreement and shall examine any major issue arising within the framework of this

Agreement, as well as interregional, multilateral or international questions of common interest.

& /en 14

2. The Joint Council shall meet at ministerial level at regular intervals, at least on a biennial

basis or on an ad-hoc basis as mutually agreed. It may also meet via teleconference, video-

conference or through other means, as mutually agreed by the Parties.

3. The Joint Council shall be composed of representatives of each of the Parties at ministerial

level in accordance with the Parties' respective internal arrangements and taking into consideration

the specific issues to be addressed. The Joint Council shall meet in all necessary configurations, by

mutual agreement.

4. When the Joint Council addresses any matter related to Part III of this Agreement, it shall be

composed of representatives of each of the Parties with responsibility for trade-related matters

(hereinafter referred to as "Joint Council in trade configuration").

5. The Joint Council shall adopt its own rules of procedure and the rules of procedure of the

Joint Committee.

6. The Joint Council shall be co-chaired by one representative of the EU Party and one

representative of the MERCOSUR Party in accordance with the provisions laid down in its rules of

procedure and taking into consideration the specific issues to be addressed at any given session.

7. The Joint Council shall examine proposals and recommendations and have the power to take

decisions, including on the interpretation of provisions, and make appropriate recommendations as

provided for in this Agreement. Decisions and recommendations shall be adopted by agreement of

the Parties and in accordance with the rules of procedure of the Joint Council. Decisions shall be

binding on the Parties, which shall take all necessary measures, in accordance with their internal

procedures, to implement them. Within the scope of Part II of this Agreement, the Joint Council

shall also have the power to take decisions and make recommendations as mutually agreed by

the Parties.

& /en 15

8. The Joint Council may delegate to the Joint Committee any of its functions, including the

power to take binding decisions, in accordance with the Joint Council's rules of procedure.

ARTICLE 2.3

Joint Committee

1. A Joint Committee is hereby established.

2. The Joint Committee shall assist the Joint Council in the performance of its duties.

3. The Joint Committee shall prepare the meetings of the Joint Council and shall be responsible

for the correct implementation of this Agreement.

4. The Joint Committee shall be composed of representatives of each of the Parties at senior

official level or as otherwise designated by the Parties in accordance with their internal

arrangements and taking into consideration the specific issues to be addressed at any given session.

5. When the Joint Committee addresses any matter related to Part III of this Agreement it shall

be composed of representatives of each of the Parties with responsibility for trade-related matters

(hereinafter referred to as "Joint Committee in trade configuration").

6. When the Joint Committee addresses any matter related to Part II of this Agreement it shall be

composed of representatives of each of the Parties with responsibility for those matters, in

accordance with the Parties' respective internal arrangements.

& /en 16

7. The Joint Committee shall have the power to take decisions as provided for in this Agreement

or where such power has been delegated to it by the Joint Council. The Joint Committee shall adopt

decisions by agreement of the Parties. The decisions shall be binding on the Parties, which shall

take the measures necessary for the implementation of those decisions. When exercising delegated

powers, the Joint Committee shall take its decisions in accordance with the rules of procedure of the

Joint Council.

8. Without prejudice to the specific provisions in Chapter 29, any Party may refer any issue

concerning the application or interpretation of the Agreement to the Joint Committee.

9. The Joint Committee shall be co-chaired by one representative of the MERCOSUR Party and

one representative of the EU Party, taking into consideration the specific issues to be addressed in

any given session.

10. The Joint Committee shall generally meet once a year to review the implementation of this

Agreement, on a date and with an agenda agreed in advance by the Parties, alternately in Brussels

and in a signatory MERCOSUR State. Additional meetings may also be convened by mutual

agreement, at the request of either the EU Party or MERCOSUR. It may also meet via

teleconference, video-conference or through other means, as mutually agreed by the Parties.

ARTICLE 2.4

Subcommittees and other bodies

1. The Joint Committee may decide to set up subcommittees or other bodies to assist in the

exercise of its functions and to address specific tasks or subjects. It may decide to change the tasks

assigned to, or to dissolve, any subcommittees or other structure set up for these purposes.

& /en 17

2. The Joint Committee shall adopt rules of procedure which determine the composition, duties

and functioning of the subcommittees and other bodies.

3. The creation or existence of any subcommittees shall not prevent the Parties from bringing

any matter directly to the Joint Committee.

4. Except as otherwise provided for in this Agreement, subcommittees and other bodies

established by this Agreement or by the Joint Committee shall report on their activities to the Joint

Committee regularly or when requested.

5. The Subcommittees addressing trade and trade-related matters, which are established pursuant

to Article 9.9(4) shall be governed by Article 9.9 and shall report to the Joint Committee in trade

configuration.

6. A Subcommittee on International Cooperation and Development is hereby established to

promote, coordinate and supervise the implementation of cooperation activities in the areas referred

to in Part II of this Agreement, as well as the follow-up, monitoring and evaluation of those

cooperation initiatives. It shall assist the Joint Committee in the performance of its functions

regarding these matters.

ARTICLE 2.5

Joint Parliamentary Committee

1. A Joint Parliamentary Committee is hereby established to foster closer relations and ensure

regular dialogue between the European Parliament and the Parliament of MERCOSUR.

& /en 18

2. The Joint Parliamentary Committee shall consist of members of the European Parliament, on

the one hand, and of members of the Parliament of MERCOSUR on the other. It shall meet at

intervals which it shall itself determine.

3. The Joint Parliamentary Committee shall establish its own rules of procedure.

4. The Joint Parliamentary Committee shall be presided in turn by the European Parliament and

the Parliament of MERCOSUR.

5. The Joint Parliamentary Committee will be kept informed of progress made in the

implementation of this Agreement.

6. The Joint Parliamentary Committee may make recommendations to the Joint Council.

ARTICLE 2.6

Relationship with civil society

1. In order to facilitate the implementation of this Agreement, the Parties shall promote

consultations with civil society through the establishment of an appropriate consultation mechanism

and the promotion of interaction between the representatives of their civil society.

2. The Parties shall promote dialogue between the Economic and Social Committee, for the

European Union, and the Consultative Social and Economic Forum, for MERCOSUR, and

encourage their contribution to the mechanisms set out in Articles 2.7 and 2.8.

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ARTICLE 2.7

Domestic Advisory Groups

1. The EU Party and the MERCOSUR Party shall each designate a Domestic Advisory Group,

established in accordance with each Party's internal arrangements, to advise the Party concerned on

issues covered by this Agreement. It shall be composed of a balanced representation of independent

civil society organisations including non-governmental organisations, business and employers'

organisations and trade unions active on economic, development, social, human rights,

environmental and other matters.

2. The Parties shall promote a regular dialogue with their Domestic Advisory Group and shall

consider views or recommendations submitted by their respective Domestic Advisory Group on the

implementation of this Agreement.

3. In order to promote public awareness of the Domestic Advisory Groups, the EU Party and the

MERCOSUR Party shall each make available to the public the list of organisations participating in

consultations as well as the contact point for that group.

ARTICLE 2.8

Civil Society Forum

1. The Parties shall facilitate the organisation of a Civil Society Forum to conduct a public

dialogue on the implementation of this Agreement and shall agree at the first meeting of the Joint

Committee on operational guidelines for the conduct of the Civil Society Forum.

& /en 20

2. The Parties may facilitate participation in the Civil Society Forum by virtual means.

3. The Civil Society Forum shall be open to the participation of independent civil society

organisations established in the territories of either the EU Party or the MERCOSUR Party,

including members of the Domestic Advisory Groups referred to in Article 2.7. The Parties shall

promote a balanced representation, including non-governmental organisations, business and

employers' organisations and trade unions active on economic, development, social, human rights,

environmental and other matters.

4. The representatives of the Parties participating in the Joint Council or the Joint Committee, as

appropriate, shall take part in a session of the meeting of the Civil Society Forum in order to present

information on the implementation of the Agreement and to engage in a dialogue with the Civil

Society Forum.

CHAPTER 3

GENERAL PROVISIONS

ARTICLE 3.1

Security clause

Nothing in this Agreement shall be construed:

(a) to require a Party to furnish or allow access to information the disclosure of which it considers

to be contrary to its essential security interests; or

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(b) to prevent a Party from taking an action that it considers necessary to protect its essential

security interests:

(i) connected to the production of or traffic in arms, ammunition and implements of war

and to such traffic and transactions in other goods and materials, services and

technology undertaken, and to economic activities carried out, directly or indirectly for

the purpose of supplying a military establishment;

(ii) taken in time of war or other emergency in international relations; or

(iii) relating to fissionable and fusionable materials or the materials from which they are

derived; or

(c) to prevent a Party from taking any action in pursuance of its international obligations under

the UN Charter for the purpose of maintaining international peace and security.

ARTICLE 3.2

Other agreements

1. The 1995 Interregional Framework Cooperation Agreement shall cease to have effect and be

replaced by this Agreement, upon the entry into force of this Agreement.

2. This Agreement replaces the 1995 Interregional Framework Cooperation Agreement.

References to the 1995 Interregional Framework Cooperation Agreement in all other agreements

between the Parties shall be construed as references to this Agreement.

& /en 22

3. The Interim Trade Agreement shall cease to have effect and be replaced by this Agreement,

upon the entry into force of this Agreement. References to the Interim Trade Agreement in all other

agreements between the Parties shall be construed as referring to this Agreement.

4. Upon entry into force of this Agreement, any decisions adopted by the Trade Council

established by the Interim Trade Agreement, shall be deemed to have been adopted by the Joint

Council established by Article 2.2 of this Agreement. Any decisions adopted by the Trade

Committee established by the Interim Trade Agreement shall be deemed to have been adopted by

the Joint Committee established by Article 2.3 of this Agreement.

5. Notwithstanding paragraph 3 of this Article:

(a) temporary measures adopted pursuant to Articles 11.4 and 11.5 of the Interim Trade

Agreement, which are in place on the date of entry into force of this Agreement, shall remain

applicable until their natural expiration;

(b) bilateral safeguard measures adopted pursuant to Section C of Chapter 9 of the Interim Trade

Agreement, which are in place on the date of entry into force of this Agreement, shall remain

applicable until their natural expiration;

(c) dispute settlement procedures already initiated pursuant to Article 21.7 and 18.17 of the

Interim Trade Agreement shall, as from the date of entry into force of this Agreement, be

deemed to be a dispute under this Agreement and shall continue until their completion; and

(d) the binding outcome of any dispute settlement procedure initiated pursuant to Article 21.7

and 18.17 of the Interim Trade Agreement shall remain binding on the Parties after the date of

entry into force of this Agreement.

& /en 23

6. The Parties shall not be able to bring dispute settlement proceedings under this Agreement on

matters that have been the subject of a final panel report under Chapter 18 and arbitral award under

Chapter 21 of the Interim Trade Agreement.

7. Transition periods already completely or partially elapsed under the Interim Trade Agreement

shall be taken into account when calculating transition periods provided for in equivalent provisions

of this Agreement. Such transition periods under this Agreement shall be calculated starting from

the date of entry into force of the Interim Trade Agreement.

Procedural periods already completely or partially elapsed under the Interim Trade Agreement shall

be taken into account when calculating procedural periods provided for in equivalent provisions of

this Agreement.

8. The Parties may complement this Agreement by concluding specific agreements in any area

of cooperation falling within its scope. Such specific agreements may provide that they shall form

an integral part of the overall interregional relations as governed by this Agreement and shall be

subject to a common institutional framework.

ARTICLE 3.3

Territorial application

1. This Agreement shall apply:

(a) to the territories in which the Treaty on European Union and the Treaty on the Functioning of

the European Union are applicable, under the conditions laid down in those Treaties; and

& /en 24

(b) to the territories of the Argentine Republic, the Federative Republic of Brazil, the Republic of

Paraguay and the Oriental Republic of Uruguay.

2. References to "territory" in this Agreement include air space and territorial sea as provided in

UNCLOS.

3. References to territory in this Agreement shall be understood in this sense, save as otherwise

expressly provided.

4. As regards those provisions concerning the tariff treatment of goods, including provisions on

customs and trade facilitation, mutual administrative assistance in customs matters and rules of

origin, as well as the temporary suspension of this treatment, this Agreement shall also apply to

those areas of the customs territory of the European Union, as defined by Article 4 of Regulation

(EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down

the Union Customs Code1, not covered by point 1(a) of this Article.

1 OJ EU L 343, 29.12.2015, p. 1.

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PART II

POLITICAL DIALOGUE AND COOPERATION

CHAPTER 4

OBJECTIVES OF THE POLITICAL DIALOGUE AND INTERNATIONAL COOPERATION

ARTICLE 4.1

Objectives of the political dialogue

1. The Parties agree that the political dimension is an essential part of the partnership established

by this Agreement and shall strengthen and deepen the regular political dialogue between the

Parties. The Parties agree to establish a political agenda, cooperate in areas of common interest and

make efforts to coordinate their positions in order to undertake joint initiatives in the appropriate

international fora.

2. The political dialogue between the Parties shall aim to:

(a) strengthen their ties in order to contribute to peace, stability, security and prosperity and

consolidate their strategic partnership;

& /en 26

(b) promote international peace and security, preventive diplomacy, confidence-building

measures and the peaceful resolution of disputes, including through the development of joint

actions to strengthen the United Nations (hereinafter referred to as "UN") system and

multilateralism;

(c) strengthen democracy, the rule of law and the promotion and protection of human rights and

fundamental freedoms;

(d) promote human and social development, reaffirming their commitment to sustainable

development, as expressed through the adoption of the 2030 Agenda. The Parties shall

cooperate to implement and achieve the Sustainable Development Goals (hereinafter referred

to as "SDGs"), recognising that their broad and ambitious nature calls for urgent action,

follow-up and review;

(e) promote gender equality, and respect for all women and girl's rights, emphasising the gender

perspective, and address discrimination and violence based on sexual orientation, in

accordance with the internal law of each Party;

(f) contribute to disarmament and the non-proliferation of weapons of mass destruction and their

means of delivery, in full compliance with and ensuring national implementation of the

Parties' respective international obligations;

(g) enhance cooperation in the fight against racism, racial discrimination, xenophobia and related

intolerances;

(h) develop joint actions to enhance cooperation in the fight against human trafficking, the

smuggling of migrants, the illegal traffic in arms, drug trafficking and related crimes,

cybercrime and other forms of transnational organised crime;

& /en 27

(i) promote and develop joint actions to eradicate child sexual abuse, including the production

and dissemination of child abuse material and the fight against travelling sex offenders;

(j) enhance cooperation in fighting against corruption and, in preventing the use of their financial

systems for laundering proceeds of criminal activities and for the financing of terrorism, and

in identifying, recovering and returning illicit assets;

(k) act against impunity for the most serious crimes under international law that are of concern to

the international community as a whole;

(l) enhance cooperation in the prevention and suppression of acts of terrorism, in accordance

with international conventions to which Member States of the European Union and Signatory

MERCOSUR States are party, the relevant UN resolutions and the Parties' respective laws

and regulations;

(m) exchange views and improve dialogue on international tax matters, including global standards

and transparency;

(n) act in favour of their respective regional integration, considered to be one of the means to

achieve sustainable development, as well as an instrument for competitive integration in the

world economy;

(o) develop mutual understanding and promote consensus on interregional and international

issues, in particular through cooperation in multilateral fora and the development of joint

initiatives;

(p) develop joint actions to strengthen the UN system and multilateralism in order to face

effectively, efficiently and expeditiously the most important current and future challenges;

& /en 28

(q) build wide political coordination at international level to support and strengthen multilateral,

transparent and democratic multi-stakeholder processes for internet governance, with the

involvement of governments, the private sector, civil society, international organisations,

technical and academic communities, and all other relevant stakeholders, in accordance with

their respective roles, responsibilities and capabilities;

(r) discuss legal and judicial matters of mutual interest; and

(s) address other topics as agreed by the Parties.

ARTICLE 4.2

Objectives of international cooperation and development

1. The Parties, reaffirming the need to strengthen their partnership, highlight the importance of

international cooperation and development and agree that interregional cooperation and its

modalities shall have as one of its main purposes to facilitate the implementation of this Agreement.

2. The Parties shall carry out cooperation projects and joint activities through all existing and

future instruments and methodologies and available means, including triangular cooperation. Such

cooperation may include, inter alia:

(a) promoting investment and job creation through mobilising financial resources inter alia

through the leveraging of grants and loans to achieve sustainable development outcomes;

(b) supporting capacity building through training courses, workshops and seminars and the

exchange of experts, studies, joint research and good practices;

& /en 29

(c) promoting institutional know-how in both regions through cooperation activities;

(d) promoting financing for development through all instruments available to each Party and

other forms of innovative financial mechanisms;

(e) promoting access innovative technologies, as well as the enhancement of national capacities;

(f) developing specific actions to reduce poverty, fight hunger and promote social inclusion and

cohesion;

(g) consolidating existing regional cooperation networks and platforms, and

(h) promoting cooperation between the public administrations and institutions of the Parties.

3. The Parties agree to promote the mobilisation of financial resources for the implementation of

this Agreement, in close partnership with the European Investment Bank, European financial

institutions and institutions from Signatory MERCOSUR States, as well as international and

regional financial institutions.

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ARTICLE 4.3

Resources

1. Within the aim of contributing to reaching the objectives of the cooperation established in this

Agreement, the Parties commit themselves to providing, within the limits of their capacities and

through their own channels, the appropriate resources, including financial resources, and encourage

development-related public and private financial institutions in both regions to cooperate actively

for that purpose.

2. The Parties shall encourage the European Investment Bank and other financial institutions to

continue their operations in Signatory MERCOSUR States, in accordance with their procedures and

financing criteria, according to their respective laws and regulations and without prejudice to the

powers of their competent authorities.

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CHAPTER 5

COOPERATION ON DEMOCRATIC PRINCIPLES,

HUMAN RIGHTS, THE RULE OF LAW

AND INTERNATIONAL PEACE AND SECURITY

ARTICLE 5.1

Cooperation on democratic principles, human rights and the rule of law

1. The Parties shall cooperate on the promotion and protection of human rights, including the

ratification and implementation of international human rights instruments, and on the strengthening

of democratic principles and the rule of law.

2. Such cooperation may include:

(a) the effective implementation of the international instruments of human rights to which they

are Parties, as well as the recommendations emanating from the United Nations Human

Rights Treaty Bodies, Special Procedures of the United Nations Human Rights Council and

the Universal Periodic Review;

(b) the integration of human rights into national policies and development plans;

(c) the strengthening of the capacity to apply democratic principles and practices;

(d) the exchange of good practices on national action plans on democracy and human rights;

& /en 32

(e) awareness raising and education in human rights, democracy and the culture of peace;

(f) the strengthening of democratic and human-rights-related institutions, as well as the legal and

institutional frameworks for the promotion and protection of human rights and the rule of law;

(g) the development of joint initiatives of mutual interest in the framework of relevant human-

rights-related institutions of the UN and multilateral fora;

(h) the promotion of democracy, international law, including human rights, fundamental

freedoms and the rule of law, including in multilateral fora;

(i) the collaboration and coordination, including in third countries, where appropriate, with

regard to the practical advancement of democratic principles, human rights and the rule of

law, in particular with regard to political rights and fundamental freedoms, including

enhancing transparent, credible and inclusive electoral processes in line with international

standards;

(j) the reinforcement of good governance at national, regional and local level, including the

accountability and transparency of institutions, supporting the participation of citizens and

involvement of civil society, and fighting against corruption; and

(k) the promotion of the prevention of genocide, crimes against humanity, war crimes and any

other crimes under the jurisdiction of the International Criminal Court.

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ARTICLE 5.2

Gender equality and women, peace and security

1. The Parties shall promote gender equality and the empowerment of all women and girls. They

acknowledge the necessity of gender equality and the empowerment of women and girls as a

precondition to fully achieve inclusive development, democracy and security. The Parties shall

explore further schemes of cooperation and potential synergies between respective policies and

initiatives, in line with international standards and commitments such as the Convention on the

Elimination of All Forms of Discrimination against Women (CEDAW), the 2030 Agenda and UN

Security Council Resolution (UNSCR) 1325 on women, peace and security.

2. Such cooperation may include:

(a) fostering effective gender mainstreaming;

(b) promoting women's political participation and leadership, women's access to quality

education, women's economic empowerment and women's increased participation in the

workforce;

(c) strengthening national and regional institutions to address and handle issues related to

violence against women, including the prevention of and protection from sexual and gender-

based violence, investigation and accountability mechanisms, support to victims and the

promotion of conditions of safety and security for women and girls;

& /en 34

(d) actively reinforcing women's human rights, including freedom from human rights violations

and any type of violence against women, and women's access to justice;

(e) supporting the development and implementation of national action plans on UNSCR 1325;

and

(f) enhancing cooperation with relevant bodies of the UN and other international organisations.

ARTICLE 5.3

Weapons of mass destruction

1. The Parties recognise the central role of the Treaty on the Non-Proliferation of Nuclear

Weapons, done in London on 1 July 1968, and its three equally important and reinforcing pillars:

the disarmament, non-proliferation and the peaceful use of nuclear energy.

2. The Parties consider that the proliferation of weapons of mass destruction (hereinafter

referred to as "WMDs") and their means of delivery, both to State and non-State actors, represents

one of the most serious threats to international stability and security. The Parties therefore agree to

cooperate and to contribute to countering the proliferation of WMDs and their means of delivery

through full compliance with and national implementation of their existing obligations under

international disarmament and non-proliferation treaties and agreements and other relevant

international obligations. The Parties agree that this paragraph constitutes an essential element of

this Agreement.

& /en 35

3. The Parties agree to cooperate and to contribute to countering the proliferation of WMDs and

their means of delivery by:

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

international instruments; and

(b) establishing an effective system of national export controls, controlling the export as well as

transit of WMDs related to goods, including a WMD end-use control on dual-use

technologies and containing effective sanctions for breaches of export controls.

4. The Parties shall establish a regular political dialogue to accompany and consolidate these

elements.

ARTICLE 5.4

Serious crimes of international concern and the International Criminal Court

1. The Parties reaffirm that there must be no impunity for the most serious crimes of concern to

the international community, such as the crimes falling within the jurisdiction of the International

Criminal Court and that these crimes must be prosecuted by national and international means, as

appropriate, in accordance with the principle of complementarity.

& /en 36

2. The Parties, considering that an effective International Criminal Court constitutes a significant

development for international peace and justice, agree to cooperate in promoting universal

accession to the Rome Statute of the International Criminal Court, done in Rome on 17 July 1998

(hereinafter referred to as "Rome Statute"), and to this end:

(a) continue to take steps to implement the Rome Statute and its amendments, and to ratify and

implement the related instruments, such as the Agreement on the Privileges and Immunities of

the International Criminal Court, adopted in New York on 9 September 2002;

(b) share, where appropriate, experience on the adoption of national legislation aiming at the

effective implementation of the Rome Statute; and

(c) take measures to safeguard the integrity of the Rome Statute.

ARTICLE 5.5

Small arms and light weapons and other conventional weapons

1. The Parties undertake to cooperate and to ensure coordination and complementarity and to

explore possible synergies in their efforts to regulate or improve the regulation of international trade

in conventional arms and to prevent, combat and eradicate the illicit trade in arms, at global,

regional and sub-regional level.

& /en 37

2. At global level, the Parties highlight the unique framework given by the Arms Trade Treaty,

adopted in New York on 2 April 2013 (hereinafter referred to as "ATT"), in order to achieve this

cooperation and complementarity between national control systems for transfers of conventional

arms, including its provisions on cooperation and assistance. They also agree on the importance of

promoting the universalisation and full implementation of the ATT by all UN member states.

3. The Parties recognise that the illicit manufacture, transfer and circulation of small arms and

light weapons and their excessive accumulation and uncontrolled spread in many regions of the

world have a wide range of humanitarian and socio-economic consequences and pose a serious

threat to peace, reconciliation, safety, security, stability and sustainable development at individual,

local, national, regional and international level.

4. The Parties agree to fully implement their respective obligations to deal with the illicit trade in

small arms and light weapons, including their ammunition, under existing international agreements

to which they are party and UN Security Council resolutions, as well as their commitments within

the framework of other international instruments applicable in this area, such as the UN Programme

of Action to prevent, combat and eradicate the illicit trade in small arms and light weapons in all its

aspects.

5. The Parties recognise the importance of domestic control systems for the transfer of

conventional arms in line with existing international standards. The Parties agree to apply such

controls in a responsible manner, as a contribution to international and regional peace, security and

stability, and to the reduction of human suffering, as well as to the prevention of diversion of

conventional weapons.

& /en 38

ARTICLE 5.6

Cooperation in the field of counterterrorism

1. The Parties reaffirm their commitment in the fight against terrorism in all its forms and

manifestations, in accordance with international law, human rights law and international

humanitarian law, the relevant UN resolutions and their respective legislation.

2. The Parties agree to cooperate and where there is joint interest prevent, fight and criminalise

all acts of terrorism in accordance with UN instruments to which they are parties.

3. The Parties agree not to provide assistance or refuge to the authors or instigators of any type

of terrorist activity, or to any other participant therein, in accordance with Resolutions 1373 (2001)

and 1624 (2005) of the UN Security Council. They shall cooperate in particular:

(a) in the framework of the full implementation of Resolutions 1267 (1999), 1373 (2001),

1624 (2005), 1904 (2009), 2178 (2014), 2253 (2015), 2322 (2016) and 2331 (2016) of

the UN Security Council and other relevant UN resolutions and international and regional

conventions and instruments;

(b) by promoting cooperation among UN member states to effectively implement the UN Global

Counter-Terrorism strategy;

(c) by exchanging experiences and good practices in the area of protection of human rights,

humanitarian law and international law in the fight against terrorism;

& /en 39

(d) by exchanging views on means and methods used to counter terrorism, including cooperation

in technical fields, and training, and by exchanging experiences and good practices in respect

of preventing violent extremism that lead to terrorism, especially in the framework of

implementation of sections I and IV of the UN Global Counter-Terrorism Strategy in respect

of terrorism prevention; and

(e) by addressing the structural causes that are at the root of the phenomenon of terrorism and

violent extremism.

ARTICLE 5.7

Cooperation on peacebuilding and peacekeeping

1. The Parties reaffirm their commitment to cooperate in promoting international peace and

security under the aegis of the UN.

2. With regard to UN peacebuilding and peacekeeping, the Parties shall establish a dialogue on

peace and security issues with a view to initiating cooperation in the field of capacity building and

exchange of best practices, among others.

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ARTICLE 5.8

Humanitarian assistance and disaster risk management

1. The Parties reaffirm their commitment to the UN Framework in the field of disaster risk

reduction and response and agree to recognise the reduction of vulnerability and risk and the

promotion of resilience as their priorities.

2. For the purposes set out in paragraph 1, the Parties shall explore possibilities to coordinate

humanitarian assistance and disaster response activities.

ARTICLE 5.9

Cooperation in multilateral, regional and international fora and organisations

1. The Parties reaffirm their commitment to the principles of the UN Charter. The Parties share a

commitment to multilateralism and efforts to improve the effectiveness of regional and international

fora and organisations, such as the UN and its specialised organisations and agencies, and other

multilateral fora.

2. The Parties shall maintain effective consultation mechanisms on the margins of multilateral

fora. At the UN, the Parties shall establish appropriate consultation mechanisms at the General

Assembly of the UN and UN Offices as appropriate and agreed by the Parties.

& /en 41

ARTICLE 5.10

Cybersecurity and information and communication technologies

The Parties recognise the importance of the cooperation and the exchange of views in the field of

cybersecurity, regarding the use of information and communication technologies (hereinafter

referred to as "ICTs"), in the context of international peace and security, including on norms, rules

and principles of responsible behaviour of States, the application of international law to the use of

ICTs, and the development of confidence-building measures and capacity building.

ARTICLE 5.11

Cybercrime

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

multilateral, regional and national responses. The Parties shall strengthen cooperation to prevent

and combat cybercrime through the exchange of information and practical cooperation, in

compliance with their respective legal frameworks and laws, and with applicable international

instruments on cybercrime. The Parties shall endeavour to work together where appropriate in the

development of effective laws, policies and practices to prevent and combat cybercrime wherever it

occurs.

2. The Parties shall, as appropriate within their respective legal frameworks, exchange

information including in the areas of education and training of cybercrime investigators, the conduct

of cybercrime investigations and digital forensics.

& /en 42

CHAPTER 6

COOPERATION ON JUSTICE, FREEDOM AND SECURITY

ARTICLE 6.1

Migration and international protection of refugees

1. The Parties reaffirm the importance that they attach to dealing effectively with migration

flows and agree to strengthen their cooperation on migration issues on the basis of the principle of

national sovereignty, shared responsibility and related issues such as the potential economic, social

and cultural contribution of migrants to countries of origin, transit and destination.

2. The Parties shall focus in particular on:

(a) the root causes of migration;

(b) facilitation of movement of their nationals between their territories in accordance with

applicable law and respective competences;

(c) full respect for the human rights of all migrants and their families, as well as measures against

racism and xenophobia;

(d) the mainstreaming of a gender perspective on migration;

(e) family reunification, in accordance with the applicable law, including international human

rights law;

& /en 43

(f) the bi-regional cooperation for the prevention of and the fight against the smuggling of

migrants and trafficking in persons, especially children and persons in vulnerable situations,

including women at risk, and for the protection of victims, in accordance with the Convention

against Transnational Organized Crime, adopted in New York on 15 November 2000, and its

Additional Protocols on Trafficking in Persons and Smuggling of Migrants;

(g) regular exchanges of information on legislative and administrative measures applicable to

migrants and experiences on migration issues;

(h) matters arising from the implementation of the relevant international instruments on the

protection of refugees and asylum seekers;

(i) exploring opportunities for cooperation at a regional level on voluntary resettlement and other

forms of humanitarian admission of refugees, as part of reaching collective solutions to the

growing global phenomenon of large movements of refugees; and

(j) bi-regional cooperation for the prevention of irregular migration.

3. The Parties shall cooperate to ensure safe, orderly and regular migration, readmitting their

own nationals irregularly staying in the territory of the other Party and fighting against trafficking in

human beings and the smuggling of migrants. They shall also cooperate on the exchange of

information, along with the sharing of data and statistics on migration.

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4. Each Member State of the EU and each Signatory MERCOSUR State shall readmit its own

nationals irregularly staying in the territory of the other Party at the latter's request. Appropriate

travel documents ensuring effective return shall be provided for this purpose. The Parties shall

ensure safe and dignified treatment to irregular staying migrants. The return of non-admitted

persons shall be also ensured under human, dignified and fair conditions, in accordance with the

applicable law, including remedies provided therein.

5. Upon the request of one of the Parties, Signatory MERCOSUR States individually and the EU

or any of the Member States individually shall endeavour to negotiate and conclude specific

agreements, in order to further facilitate the cooperation between competent authorities for the

identification and documentation of nationals irregularly staying in the territory of the other Party to

be readmitted. Such agreements would also address the readmission of persons who are not their

nationals but who hold a valid residence authorisation issued by one of the Parties or who have

entered the territory of one Party coming directly from the territory of the other Party.

6. The Parties shall promote the development and implementation of national legislation and

practices as regards the international protection of refugees, with a view to satisfying the provisions

of the United Nations Convention relating to the Status of Refugees, done at Geneva

on 28 July 1951, and of its Protocol of 1967, and other relevant regional and international

instruments to ensure respect for the principle of "non-refoulement". The Parties shall focus in

particular on exploring opportunities for cooperation at a regional level on voluntary resettlement

and other forms of humanitarian admission of refugees, as part of reaching collective solutions to

the growing global phenomenon of large movements of refugees.

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ARTICLE 6.2

Legal and judicial cooperation

1. The Parties agree to develop judicial cooperation in civil matters, in particular as regards the

negotiation, ratification and implementation of multilateral conventions on civil judicial cooperation

and, in particular, the Conventions of The Hague Conference on Private International Law in the

field of international legal cooperation and litigation as well as the protection of children.

2. The Parties agree to strengthen judicial cooperation in criminal matters based on the relevant

standards of the UN, international and regional organisations such as the Council of Europe and the

Organization of American States, in particular in the area of mutual legal assistance, extradition and

transfer of prisoners.

ARTICLE 6.3

Cooperation on countering the world drug problem

1. The Parties, based on the principle of common and shared responsibility, shall cooperate to

ensure a balanced and integrated approach towards addressing all aspects of the world drug

problem, including challenges such as new psychoactive substances. In this regard, drug policies

and actions shall be aimed at reinforcing structures, reducing the supply of, trafficking in and the

demand for illicit drugs, coping with the health and social consequences of drug abuse with a view

to reducing harm, and more effective prevention of diversion of chemical precursors used for the

illicit manufacture of narcotic drugs and psychotropic substances.

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2. The Parties shall agree on the necessary methods of cooperation to attain the objectives

referred to in paragraph 1. Actions shall be based on commonly agreed principles along the lines of,

in particular, the three UN Drug Control Conventions of 1961, 1971 and 1988 and the Outcome

Document of the UN General Assembly Special Session on the World Drugs Problem, adopted in

New York on 19 April 2016.

3. The Parties agree to support and encourage the development of policies and measures to

address the world drug problem.

ARTICLE 6.4

Cooperation on combating corruption and transnational organised crime,

on anti-money-laundering and on countering the financing of terrorism

1. In accordance with their internal laws and regulations and applicable bilateral and

international instruments, such as the UN Convention against Transnational Organized Crime,

adopted in New York on 15 December 2000, and its protocols, and the UN Convention against

corruption, adopted in New York on 31 October 2003, the Parties shall strengthen their cooperation

in the fight against transnational organised crime and corruption, including prevention and

investigation activities, the prosecution of offenders, and mutual legal assistance.

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2. The Parties agree on the need to work towards preventing and combating in an effective way

the use of their financial institutions and designated non-financial businesses and professions for the

purpose of financing terrorism and laundering the proceeds of criminal activities, including drug

trafficking, trafficking in persons, especially children, women at risk and other persons in

vulnerable situations, arms trafficking and corruption, in accordance with the recommendations of

the Financial Action Task Force (hereinafter referred to as "FATF") and taking into account the

work of the Latin American Financial Action Group (hereinafter referred to as "GAFILAT").

3. The Parties agree to cooperate with a view to combating and preventing money laundering

and terrorist financing and ensuring effective and full implementation of the FATF

recommendations and taking into account the work of the GAFILAT. This cooperation extends to

the tracing, identification, seizure, confiscation, recovery and return of assets or funds derived from

the proceeds of crime.

4. The cooperation referred to in paragraph 3 shall allow exchanges of relevant information

within the framework of the laws and regulations of each Party and in line with international

standards to prevent and combat money laundering and the financing of terrorism, in compliance

with the recommendations of FATF and taking into account the work of the GAFILAT.

5. The Parties agree, subject to and in accordance with their respective laws and regulations and

applicable bilateral and international instruments, to undertake measures to support the

identification, tracing, freezing, seizure and confiscation of the proceeds of criminal activities.

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ARTICLE 6.5

Personal data

1. The Parties recognise the importance of promoting and protecting the fundamental rights to

privacy and data protection, including security of personal data, as a central factor of consumer trust

in the digital economy and an essential element for further developing commercial exchanges and

law enforcement cooperation.

2. The Parties shall cooperate to ensure the effective protection of the rights referred to in

paragraph 1, including in the context of the prevention and combatting of terrorism and of other

transnational crimes. Cooperation at bilateral and multilateral level shall take into account existing

international commitments and the Parties' respective laws and regulations where applicable. It may

include capacity-building, technical assistance and the exchange of information and expertise.

ARTICLE 6.6

Consular protection

1. Each Signatory MERCOSUR State agrees that the diplomatic and consular authorities of any

represented EU Member State shall provide protection to any national of an EU Member State

which does not have a permanent representation in its territory in a position to provide consular

protection in a given case, on the same conditions as to nationals of that EU Member State.

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2. Each EU Member State agrees that the diplomatic and consular authorities of any represented

Signatory MERCOSUR State shall provide protection to any national of a Signatory MERCOSUR

State which does not have a permanent representation in its territory in a position to provide

consular protection in a given case.

CHAPTER 7

COOPERATION ON SUSTAINABLE DEVELOPMENT

ARTICLE 7.1

Objectives and working methods

1. The Parties reaffirm their commitment to promote sustainable and inclusive economic

development, contributing to the principles set forth in the Rio Declaration on Environment and

Development adopted by the United Nations Conference on Environment and Development in 1992

(hereinafter referred to as "Rio Declaration on Environment and Development of 1992"), supported

by the Outcome Document of the United Nations Conference on Sustainable Development of 2012

incorporated in Resolution 66/288 adopted by the United Nations General Assembly

on 27 July 2012 entitled "The Future We Want" (hereinafter referred to as "the Outcome Document

of the UN Conference on Sustainable Development of 2012 entitled "The Future We Want" ") and

the 2030 Agenda. In that framework, the Parties shall cooperate to implement and achieve the

SDGs, recognising that their broad and ambitious nature calls for urgent action.

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2. The Parties recognise the importance of dialogue and cooperation as essential for addressing

the challenges linked to achieving the SDGs and further recognise the importance of multi-

stakeholder engagement, including the private sector and civil society, in international cooperation.

3. The Parties will work towards consolidating economic growth in a way that reduces

inequalities and respects the principles of sustainable development.

4. The Parties should promote sustainable consumption and production patterns and raise

awareness of the economic and social costs of environmental damage and its associated impact on

human well-being.

5. The Parties shall promote sustainable development through dialogue, the sharing of good

practices, good governance and sound financial management.

6. The Parties share a common goal of eradicating poverty and supporting inclusive economic

development and shall work together whenever possible to achieve this aim.

7. The Parties shall work together to strengthen the implementation of the 2030 Agenda and the

methodologies of follow-up, accountability to their citizens on the implementation of results related

to the monitoring of the 2030 Agenda and evaluation of cooperation actions, including qualitative

and quantitative data taking into account the impact on the ground.

8. Acknowledging gender equality and the empowerment of women and girls as essential for

sustainable development, the Parties will explore further schemes of cooperation.

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9. The Parties shall promote structures for South – South and triangular cooperation. Such

cooperation will involve establishing joint initiatives with third countries with the aim of working

together to support the design and implementation of multilevel strategies for the 2030 Agenda, as

well as any other relevant future bi-regional and international agreements on sustainable

development.

10. The Parties understand the comprehensive nature of the SDGs. In this context, the Parties

should encourage innovative partnerships, which embrace a multi-stakeholder approach in order to

promote and implement international development initiatives. These partnerships may include the

private sector, organised civil society, philanthropic organisations and local and regional authorities.

11. The Parties recognise the importance of a comprehensive approach to social development,

which must go hand in hand with economic development and environmental sustainability. They

shall give priority to promote full employment, social inclusion and cohesion, as well as the

participation of civil society. In line with the objectives of SDG 8, they shall promote decent work

for all as provided by the International Labour Organisation (hereinafter referred to as "ILO")

Declaration on Social Justice for a Fair Globalization, adopted by the International Labour

Conference at its 97th Session in Geneva on 10 June 2008 (hereinafter referred to as "ILO

Declaration on Social Justice for a Fair Globalization").

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ARTICLE 7.2

Implementation of EU-MERCOSUR and bilateral cooperation

1. The provisions of this Agreement shall not affect the implementation of programmes, projects

and activities under the 1995 Interregional Framework Cooperation Agreement, and shall not affect

ongoing or future bilateral cooperation developed on the basis of bilateral programming

instruments, such as indicative programmes or any other relevant instrument.

2. Cooperation shall be carried out in line with the relevant internationally agreed principles and

policies to which both Parties have adhered, and in line with the relevant legislative framework of

the EU on the one hand, and of MERCOSUR and its Signatory States, on the other hand.

ARTICLE 7.3

Facilitation arrangements

The Parties shall ensure, as appropriate, the customs and tax exemptions and visa facilities

necessary to implement the cooperation initiatives agreed under this Part of the Agreement and

under the Protocol on Cooperation.

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ARTICLE 7.4

Cooperation on public administration

The Parties will introduce cooperation and dialogue to identify actions aimed at developing

capacities for the design, effective implementation and evaluation of public policies. In this respect,

the Parties shall cooperate in matters relating to public administration and institutions with a view to

strengthening institutional capacities, including by promoting transfer of know-how and training of

government personnel, improving management processes of public administrations as well as

facilitating the modernisation of regulatory frameworks for the effective implementation of

this Agreement.

ARTICLE 7.5

Environment

1. The aim of environmental cooperation should be to contribute to the protection, conservation,

sustainable use of natural resources and to the promotion of sustainable development through

coordination, integration and mutually supportive consideration of its three dimensions – economic,

social and environmental – in accordance with the principles set out in the Rio Declaration

on Environment and Development of 1992, supported by the Outcome Document of the

UN Conference on Sustainable Development of 2012 entitled "The Future We Want" and

the 2030 Agenda, and taking into account different national realities, capacities and levels of

development and respecting national policies and priorities.

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2. Environmental cooperation should focus in particular on:

(a) exchanging of information, technical expertise, environmental practices and experiences on

programmes, projects and regulations promoting the protection, conservation, restoration, and

sustainable use of natural resources and sustainable development, in particular with respect to

applicable legislation, international commitments and goals;

(b) implementing multilateral environment agreements and the outcomes of the UN Environment

Assembly and promoting environmental goals;

(c) mainstreaming environmental consideration in all sectors of cooperation;

(d) the conservation and sustainable use of biological diversity, and the fair and equitable sharing

of the benefits arising from the utilisation of genetic resources considering any format, by

means of appropriate access to such resources, in accordance with national legislation, as well

as cooperation on water, chemicals, waste and other mutually agreed priority areas;

(e) cooperation on and encouragement of the development, dissemination and diffusion and

transfer of environmentally sound technologies to developing countries on favourable terms,

including on concessional and preferential terms, as mutually agreed;

(f) increasing the availability in developing countries of the means of implementation towards

the full achievement of national sustainable development strategies, recognising the urgency

that dealing with their broad and ambitious nature requires and facilitating participatory

stakeholder involvement as appropriate. Under this Agreement, environmental cooperation

should also promote the development of environmentally sound infrastructure.

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ARTICLE 7.6

Sustainable urban development

1. The Parties recognise the importance of policies to promote sustainable urban development

and of the need to contribute to the effective implementation of the New Urban Agenda adopted by

the UN Conference on Housing and Sustainable Urban Development (HABITAT III) and the

aspects of the 2030 Agenda relevant to sustainable urban development.

2. The Parties shall promote cooperation and partnership involving all the key actors relevant to

policy and practice in the field of sustainable urban development, in particular, on ways to address

urban challenges in an integrated and comprehensive manner.

3. The Parties shall promote knowledge sharing and the exchange of experiences on, inter alia,

disaster risk reduction and management policies aimed at strengthening the resilience of cities and

human settlements. The Parties shall do so, inter alia, through the development of quality

infrastructure and spatial planning and implementation of urban development plans. These plans

should consider key topics such as the effective use of renewable energy sources, urban inclusion,

taking into account the different levels of urbanisation within the global south, and financing

mechanisms for urban development projects at the local, national and regional level.

4. To this end, the Parties shall commit to expanding, wherever possible, concrete opportunities

for decentralised, city-to-city cooperation at regional and international level, with a view to

improving urban governance and capacity building through exchanges of experience and practice,

as well as mutual learning, on sustainable solutions to urban challenges.

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ARTICLE 7.7

Climate change

1. The Parties recognise that the global threat of climate change calls for the widest possible

cooperation of all countries to reduce global greenhouse gas emissions and to adapt to the adverse

effects of climate change in a manner that does not threaten food production, with developed

countries continuing to take the lead. The Parties reiterate their commitment to the implementation

of the Paris Agreement adopted under the United Nations Framework Convention on Climate

Change, done at New York on 9 May 1992, (hereinafter referred to as "UNFCCC"), reflecting

equity and the principle of common but differentiated responsibilities and respective capabilities, in

light of different national circumstances.

2. The Parties shall cooperate, as appropriate, on trade-related climate change issues bilaterally,

regionally and in relevant international fora. In this context, recognizing the role of trade in

contributing to the response to the urgent threat of climate change, each Party shall remain a party,

in good faith, of the UNFCCC and its Paris Agreement1.

3. The Parties agree that the second sentence of paragraph 2 constitutes an essential element of

this Agreement.

1 The international instruments herein referred to do not include amendments thereto or their

successor agreements, nor decisions, interpretations or any acts adopted by the bodies

governing such instruments, unless the Parties agree otherwise.

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4. Nothing in this Article prejudices to the rights of a Party to have recourse to dispute

settlement procedures available under any other international agreement to which the Parties are

party, including the WTO Agreement.

5. Within the scope of their respective competences, and based on the UNFCCC, and the Paris

Agreement, the Parties should enhance cooperation and policy dialogue to drive the transformation

to low greenhouse-gas (hereinafter referred to as "GHG") emissions development, in accordance

with their responsibilities and capabilities, and exchange information and experiences on, inter alia:

(a) combating climate change, guided by equity and scientific evidence, in particular through the

implementation of their respective nationally determined contributions and further

collaboration on mitigation and adaptation action for the effective implementation of the Paris

Agreement;

(b) enhancing public and private partnerships which could effectively support action to combat

climate change and adapt to its adverse effects;

(c) promoting collaborative action on technology research, development, diffusion, deployment

and transfer in order to improve resilience to climate change and to reduce GHG emissions,

including through business-oriented dialogues;

(d) monitoring, reporting and verifying GHG emissions and developing and implementing

mitigation and adaptation programmes;

(e) delivering on the Paris Agreement implementation and putting in place conditions to foster

low GHG development, increasing the ability to adapt to the adverse impacts of climate

change and fostering climate resilience in a manner that does not threaten food production, in

accordance with Article 2 of the Paris Agreement;

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(f) ensuring swift development of the Paris Agreement transparency framework for action and

support provisions, including policy dialogue and cooperation in mutually agreed priority

areas;

(g) promoting domestic climate policies and programmes in the framework of

the Paris Agreement related to mitigation and adaptation, including in deforestation and forest

degradation and restoration, as well as means to promote renewable energy, energy efficiency,

sustainable transport and sustainable and climate-resilient infrastructure development; and

(h) enhancing other areas of bilateral dialogue on climate mitigation and adaptation policy or any

other areas of mutual interest that may arise including in other related multilateral fora such as

the International Civil Aviation Organization, the International Maritime Organization and the

Montreal Protocol, concluded at Montreal on 16 September 1987, and its Kigali Amendment,

when applicable.

6. To these ends, the Parties agree to improve cooperation and exchange information and

experiences in this field, and to continue their existing obligations under the UNFCCC and the Paris

Agreement. To this effect, developed countries will provide financial resources for mitigation and

adaptation and mobilise climate finance from a wide variety of sources, instruments and channels,

taking into account the needs and priorities of developing country parties, as well as other means of

implementation for the achievement of the objectives set out in the Paris Agreement.

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ARTICLE 7.8

Oceans and seas

1. The Parties recognise the importance of the conservation and sustainable use of marine

resources, including the sustainable and responsible management of fisheries, aquaculture and other

maritime activities and their contribution to providing environmental, economic and social

opportunities for present and future generations, in the context of the sustainable use and

conservation of the oceans, seas and marine resources with the long-term objective of improving the

state of the oceans, including by strengthening the framework of international institutions and fora,

where appropriate.

2. In a manner consistent with their obligations under international law, in particular UNCLOS,

the Parties undertake to:

(a) cooperate to achieve SDG 14 – "Conserve and sustainably use the oceans, seas and marine

resources" – of the 2030 Agenda;

(b) promote better cooperation and consultation, as appropriate, within and between competent

international organisations, instruments and bodies, where applicable;

(c) adopt effective monitoring, control and surveillance measures to ensure the effective

implementation of fisheries conservation measures;

(d) cooperate at the UN towards the development of an international legally binding instrument

under UNCLOS on the conservation and sustainable use of marine biological diversity of

areas beyond national jurisdiction; and

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(e) cooperate where appropriate in relevant sub-regional, regional and multilateral bodies in

which the Parties are members, observers or cooperating non-contracting parties, towards

achieving SDG 14 and other related SDGs.

3. The Parties agree to strengthen dialogue and cooperation with regard to:

(a) supporting sustainable fisheries production, fish-farming sectors and in particular the

preservation of fishery resources, including possible interregional cooperation on several

areas, depending on the interest of the coastal State, such as scientific, technological,

industrial, economic and commercial cooperation, as well as institutional building and

training;

(b) supporting the development of an environmentally responsible and economically competitive

aquaculture industry;

(c) supporting marine scientific research and the development of research and technological

capacity, as well as promoting science-based decisions;

(d) exchanging best practices on the sustainable development of maritime economic activities of

interest to the Parties such as ocean energy, shipping, coastal and marine tourism or marine

biotechnology;

(e) combatting illegal, unreported and unregulated (hereinafter referred to as IUU) fishing,

including, where appropriate, the exchange of information on IUU activities and the support

for the building-up of the technical and administrative capacity to deal with IUU fishing;

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(f) developing area-based conservation measures and management tools, including marine

protected areas, consistent with the national and international law and based on the best

available scientific information to protect and restore coastal and marine areas and resources;

(g) reducing pressure on the oceans through, inter alia, the fight against marine litter and

pollution, including from land-based sources and maritime human activities;

(h) promoting marine spatial planning and integrated coastal zone management; and

(i) addressing climate-related issues such as adaption and mitigation of GHG emissions, sea-

level rise, ocean and coastal acidification and air pollution.

ARTICLE 7.9

Cooperation on energy

1. The Parties shall aim to facilitate the exchange of ideas, experiences and best practices on

how to improve access to secure, sustainable and affordable energy, including through the fostering

of new investments and the transfer of technology between public and private economic operators

of the Parties, especially with regard to electricity, hydrocarbon, renewable energy, including

sustainable production and use, biofuels and the efficient use of energy.

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2. Cooperation under this Article, based on the principle of the sovereign right of States to

manage their own natural resources, with a view to ensuring access to affordable, reliable,

sustainable and modern energy for all, shall take the form of, inter alia:

(a) cooperation between institutions dealing with policy, planning and modelling issues in the

energy sector;

(b) the exchange of scientific, technical and other energy research results, experiences,

publications, information and data, including the development of joint databanks shared by

the Parties' operators, in accordance with the laws and regulations of each Party;

(c) the promotion of joint conferences and technical training, including at post-graduate level;

(d) technology transfers, especially those related to renewable energy sources;

(e) the promotion of feasibility studies and the implementation of joint projects in the energy

sector between public and private economic operators and research institutions of the Parties;

(f) the participation of economic operators from the two regions in technology, development and

infrastructure joint projects, including networks with other countries; and

(g) the rationalisation and phasing-out of inefficient fossil-fuel subsidies that encourage wasteful

consumption, taking fully into account the specific needs and conditions of developing

countries and minimising the possible adverse impacts on their development in a manner that

protects the poor and the affected communities.

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ARTICLE 7.10

Cooperation on raw materials

The Parties shall cooperate in the area of raw materials with a view to, inter alia:

(a) promoting efficient, flexible, competitive and transparent international markets;

(b) fostering exchange of market information in the area of raw materials;

(d) promoting research, development and innovation in the area of raw materials;

(e) fostering exchange of information and best practices on domestic policy developments; and

(f) promoting standards of safety and environmental protection for offshore mining operations,

by increasing transparency, sharing information, including on industry safety and

environmental performance.

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CHAPTER 8

SOCIAL, ECONOMIC AND CULTURAL PARTNERSHIP

ARTICLE 8.1

Objectives

1. In the framework of their cooperation, the Parties recognise that all peoples have the right to

pursue their economic, social and cultural development. The Parties, acknowledging that social

development should progress in parallel with economic development, agree to cooperate in

enhancing social inclusion and cohesion through the reduction of poverty, injustice and inequality.

2. The main objectives of economic cooperation are to contribute to the expansion,

diversification and deepening of economic and commercial ties between the Parties, strengthening

the productive sector, with special attention to SMEs, the creation of new opportunities and an

increase in international competitiveness and innovation, and to reinforce the process of regional

economic integration.

3. Economic cooperation should be strengthened as a way of contributing to the easing of the

economic implications that might arise from structural changes resulting from this Agreement.

4. Any measure that could contribute to the further development of regional integration or the

reinforcement of the interregional relations in social, economic and cultural areas between the

Parties should be encouraged.

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ARTICLE 8.2

Corporate social responsibility

1. The Parties shall promote corporate social responsibility in accordance with international

standards, such as the OECD Guidelines for Multinational Enterprises and Due Diligence Guidance.

2. The Parties support the dissemination and implementation, on a voluntary basis, of the UN

Guiding Principles on Business and Human Rights, emphasising the importance of a comprehensive

discussion with all relevant stakeholders.

3. The Parties shall promote the voluntary incorporation by companies in their internal policies

of principles of corporate social responsibility or responsible business conduct, including by

encouraging the uptake of relevant practices, consistent with the international instruments referred

to in this Article.

ARTICLE 8.3

Industrial cooperation, business opportunities

and micro, small and medium-sized enterprises and entrepreneurs

1. The Parties recognise the importance of promoting SMEs and strengthening industry to foster

inclusive and sustainable economic growth across the regions, promote higher levels of social

cohesion, and close territorial gaps, thereby improving equity in lagging areas. The Parties

recognise that the promotion of SMEs' competitiveness contributes positively to a strengthened

social fabric, through job creation and poverty reduction, as well as reducing other economic

implications that might arise from structural changes resulting from this Agreement.

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2. The Parties shall support women's economic empowerment through entrepreneurship and

business creation.

3. The Parties shall promote industrial cooperation and strengthen cooperation on SMEs, with a

view to enhancing productivity and improving competitiveness in order to boost trade and

investment between the Parties, while balancing the opportunities provided by this Agreement to

both Parties.

4. The Parties shall promote an attractive and stable climate for greater mutually beneficial

business opportunities, including for SMEs and undertake to strengthen cooperation with the

purpose of contributing to the expansion, diversification and deepening of economic and

commercial ties between the Parties.

5. The Parties agree to promote the development of SMEs, embracing both rural and urban

firms, and encourage their introduction into international markets.

6. The implementation of this Article may include the following actions, which cover all kinds

of businesses, including SMEs:

(a) supporting regular contacts between the Parties' business sectors through business-to-business

and cluster-to-cluster events or missions, trade fairs, seminars and roundtables with a view to

promoting the identification and dissemination of information of business opportunities for

investment, industrial and technological cooperation in areas of mutual interest as well as

promoting information networks and cooperation between economic operators, especially

SMEs and clusters;

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(b) exchanging best practices that support industrial development, innovation processes and

industrial policies including the strengthening of the regional industrial policies to enhance

competitiveness in industrial sectors of mutual interest;

(c) promoting industrial cooperation projects, including technology development and innovation,

in sectors of mutual interest;

(d) promoting reciprocal and joint investments and encouraging joint ventures and clusters and

the establishment of associative processes in strategic sectors;

(e) developing mechanisms to support private-sector development, facilitating access to

innovative finance in accordance with the laws and regulations of each Party and industrial

cooperation to boost productivity, innovation and competitiveness, including providing up-to-

date information about available financing instruments for SMEs;

(f) supporting enterprises to adapt to the current trend of automation and data exchange in

manufacturing technologies;

(g) promoting joint projects among technology-, industrial- and application-oriented research

centres from the EU and MERCOSUR; and

(h) strengthening bi-regional and global value and supply chains, including the development of

suppliers for the industry.

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7. In addition to the cooperation referred to in paragraph 4, the Parties agree that cooperation

with regard to SMEs may involve, inter alia:

(a) facilitating the exchange of best practices on public policies and programmes, regulatory

frameworks, experiences, relevant information and know-how to promote and support

entrepreneurship and SMEs' creation, development and innovation;

(b) promoting SMEs' participation in fairs, commercial missions and other mechanisms at local

and international level;

(c) exchanging best practices that support SMEs' access to government procurement markets;

(d) building on existing successful partnerships and developing new strategic partnerships and

contacts between economic operators and business networks through existing or new EU or

MERCOSUR horizontal programmes dedicated to SMEs;

(e) supporting internationalisation of SMEs, including cooperation for the development of

specialised websites;

(f) promoting SMEs' participation in joint programmes and pilot projects, in particular in sectors

such as digital economy; and

(g) providing support and expertise on business development services, including quality

management systems, and promoting e-commerce to strengthen SMEs.

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ARTICLE 8.4

Tax matters

The Parties agree to cooperate bi-regionally in tax matters and commit to implement the global

standards on transparency and exchange of information, as well as the minimum standards against

base erosion and profit shifting (BEPS).

ARTICLE 8.5

Macroeconomic dialogue

The Parties shall promote the exchange of information on their respective macroeconomic trends

and policies as well as the sharing of their experiences with coordination of macroeconomic

policies. To this end, the Parties will aim to deepen the dialogue among their authorities on

macroeconomic matters. Cooperation in this area may include the organisation of seminars and

conferences.

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ARTICLE 8.6

Cooperation on consumer rights

The Parties recognise the importance of ensuring a high level of consumer protection and, to that

end, shall endeavour to cooperate in the field of consumer policy. The Parties agree that cooperation

in this field may involve, to the extent possible:

(a) exchanging information on their respective consumer protection frameworks, including on

consumer laws, consumer product safety, consumer redress and the enforcement of consumer

legislation;

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

consumer representatives; and

(c) exchanging information and promoting joint activities between both Parties' consumer bodies

upon mutual agreement.

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ARTICLE 8.7

Cooperation in statistics

The Parties shall cooperate in the area of statistics with a view to ensuring comparability of

statistical data among Signatory MERCOSUR States and between MERCOSUR and the European

Union. The activities could be developed in the form of, inter alia:

(a) support for the strengthening of a statistical system, established on the basis of administrative

structures and legal bases which would be able to meet the necessary statistical information

requirements;

(b) support for the implementation of statistical good practices based on internationally

recognised standards;

(c) the development of comparable statistical information, mainly focused on the fields of trade

in goods and services and foreign direct investment, as well as the development of

comparable macro-economic indicators; and

(d) exchange of good practices and experiences through, inter alia, training, workshops and

study visits.

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ARTICLE 8.8

Research and innovation

1. The Parties shall cooperate in the areas of scientific research, technological development and

innovation on the basis of common interest and mutual benefit and in accordance with their

respective legislation. Such cooperation shall aim to promote sustainable development, tackle

global challenges, achieve scientific excellence, improve regional competitiveness and strengthen

the relations between the Parties, taking into account their research and innovation capacities and

specific priorities. The Parties shall foster policy dialogue at regional level and use their different

instruments, including agreements for science, technology and innovation (hereinafter referred to as

"STI") cooperation, in complementary ways.

2. In order to improve the conditions for cooperation, the Parties shall also seek to:

(a) increase the mobility of researchers, scientists, experts, students and entrepreneurs as well as

the movement of scientific equipment across borders;

(b) facilitate reciprocal access to each other's STI programmes, research infrastructures and

facilities, publication and scientific data;

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

(d) promote intellectual property rights in research and innovation projects.

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3. The Parties shall promote, inter alia, the following activities to be undertaken by government

organisations, public and private research centres, higher-education institutions, innovation agencies

and networks, as well as other stakeholders, including SMEs:

(a) joint initiatives to raise awareness of STI and capacity-building programmes and opportunities

for participating in each other's programmes;

(b) joint meetings and workshops aiming at exchanging information and best practices and

identifying areas for joint research;

(c) joint research actions in areas of common interest; and

(d) mutually recognised assessment and evaluation of scientific cooperation and dissemination of

the corresponding results.

ARTICLE 8.9

Cooperation on competition matters

1. The Parties shall engage in capacity-building activities in the area of competition policy,

subject to the availability of funding for such activities under the Parties' cooperation instruments

and programmes.

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2. Technical assistance shall focus on institutional capacity-building and training of human

resources of the competition authorities, to support them in the establishment of their respective

competition regimes and effective enforcement. The aim shall be to strengthen and effectively

enforce competition law in the areas of anti-competitive practices and concentrations between

undertakings, including competition advocacy.

ARTICLE 8.10

Cooperation on digital economy

1. Cooperation activities in this area shall aim in particular to promote:

(a) exchanges of ideas, experiences and practices on information and communication technology

(hereinafter referred to as "ICT") policies with a view to building an inclusive information

society, in order to bridge the digital divide by exchanging policy principles, information,

experiences and good practices to strengthen our cooperation both in shaping digital policies

and regulatory frameworks, opening up markets and discuss research cooperation;

(b) the use of ICTs as tools to promote social, cultural and economic development, social

inclusion and cultural diversity, emphasising the entrepreneurial spirit and participatory

collaborative work;

(c) cooperation on regulatory aspects of telecommunications and audio-visual policies, including

e-commerce and exchanges of information on standards, conformity assessment and type

approval, involving civil society and the private sector in the process where appropriate;

(d) the development of e-commerce as a means to contribute to economic growth;

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(e) the efficient management of spectrum, in order to maximise its availability and optimise its

allocation and use;

(f) policies and joint actions for the dissemination, use and transfer of new ICTs, including,

where appropriate, with the participation of civil society and private sector in the process;

(g) research and innovation collaboration on ICTs within the applicable research and innovation

framework;

(h) the development of digital skills at all ages in formal and informal learning settings and

identification of training needs for digital economy, including ICT professionals;

(i) the joint formulation of actions to promote jobs and investment in SMEs and for the self-

employed, as well as to meet the particular needs of vulnerable social groups, using the

opportunities offered by ICTs;

(j) cooperation in the area of e-government and trust services such as electronic signature and

eID, with a focus on exchanging policy principles, information and good practices on the use

of ICT to modernise public administration, promote high-quality public services and improve

organisational efficiency and the transparent management of public resources; and

(k) wide political coordination at international level to ensure that the global internet governance

continues to support the continuation and development of a highly robust, dynamic and

geographically diverse Internet regime, building on the WSIS+10 outcome document

"Implementing World Summit on the Information Society outcomes: a 10-year review".

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2. The Parties consider that the global management of the internet should be based on a

transparent and democratic multi-stakeholder model, with the full involvement of, inter alia,

governments, the private sector, civil society, academia, the scientific and technological community

and international organisations, according to their respective roles and responsibilities. It should

ensure the equitable management of resources and the free flow of information, facilitate access for

all and ensure the resilient, stable and secure functioning of the internet, taking into account

multilingualism.

3. The Parties reaffirm their commitment to working together towards a people-centred,

inclusive and development-oriented information society and their agreement to continue to

coordinate positions for the World Summit on the Information Society (WSIS) follow-up

mechanisms, as well as in the other fora or organisations related to internet governance.

4. The Parties stress that every effort should be made in internet governance fora to mobilise and

ensure the meaningful and effective participation of all countries, in particular developing countries,

including all stakeholders, within their own roles, such as governments, the private sector, civil

society, academia, the scientific and technological community and international organisations.

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ARTICLE 8.11

Civil space activities

Considering the positive impact that space activities can have on economic and social development

and industrial competitiveness, the Parties agree to promote cooperation on matters of common

interest in the area of civil space activities according to the observance and fulfilment of the

international conventions and their respective legislation and in particular in the following areas:

(a) Earth observation and Earth science, including cooperation in multilateral fora and in

particular, the intergovernmental Group on Earth Observations and the Committee on Earth

Observation Satellites; with a view to addressing societal challenges and to facilitate business

and innovation partnerships on Earth observation in the framework of Copernicus by

identifying areas of common interest;

(b) satellite communications; and

(c) other peaceful uses of outer space, including space science, space exploration and space

sustainability.

ARTICLE 8.12

Transport

1. The Parties agree to cooperate in relevant areas of transport policy, including integrated

transport policy, with a view to developing and supporting an efficient, sustainable, safe and secure

and environmentally friendly transport system for both passengers and goods.

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2. Cooperation between the Parties shall aim to promote, inter alia:

(a) dialogue and exchange of information on their respective transport policies, standards and

good practices and other subjects of mutual interest;

(b) expert dialogue and cooperation within international transport fora;

(c) interconnection and interoperability of networks;

(d) a multimodal transport system approach;

(e) environmentally friendly, safe and secure transport systems;

(f) low carbon and carbon-free transport solutions, research and innovation, and smart and digital

solutions;

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

(h) the facilitation and increased efficiency of cargo movements in all transport modes through

digitalisation, the simplification of reporting requirements and the optimisation of transport

operations.

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ARTICLE 8.13

Cooperation on tourism

1. Cooperation between the Parties shall primarily aim to improve the exchange of information

and establish best practices in order to ensure the balanced and sustainable development of tourism

and to support the creation of jobs, economic development and the improvement of quality of life.

2. For the purposes of paragraph 1, the Parties shall focus on, inter alia:

(a) supporting the creation and consolidation of tourism products and services, as well as tourism

promotion channels;

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

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

(d) improving training and education in tourism services, including in the hotel industry; and

(e) promoting information exchange and cooperation for creative industries and innovation in the

tourism sector.

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ARTICLE 8.14

Cooperation on social development

1. The Parties, acknowledging that social development goes hand in hand with economic

development, agree to give priority to enhancing social cohesion through poverty eradication,

inequality reduction and the promotion of social inclusion, in particular with a view to the

fulfilment of the 2030 Agenda and its SDGs.

2. The Parties agree to enhance cooperation in the field of social affairs with the aim of

contributing to sustainable and inclusive economic growth and development and to promote

cooperation and exchanges of information with regard to, inter alia:

(a) the promotion of social rights;

(b) the development of innovative and sustainable projects involving vulnerable social groups,

such as low-income families, people of African and indigenous descent and other minorities

as well as persons with disabilities, including through labour market integration;

(c) the promotion of gender equality and the full empowerment of women in all spheres;

(d) promoting the protection of mothers and children as well as accessible and inclusive childcare

facilities;

(e) the promotion of specific programmes for youths, especially for those in vulnerable social

sectors; and

(f) improving working and living conditions in densely populated areas in less-favoured regions.

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ARTICLE 8.15

Cooperation on labour and employment

1. In line with the internationally agreed objective of promoting fair globalisation and

considering the aims of SDG 8, the Parties shall promote full employment, decent work for all,

and the respect for the fundamental principles and rights at work identified by the ILO Conventions

(the elimination of discrimination, abolition of all forms of forced labour, sustained eradication

of child labour, and freedom of association and collective bargaining) in accordance with

the 2008 ILO Declaration on Social Justice for a Fair Globalisation and other international

commitments.

2. The Parties agree to enhance cooperation in the area of employment and to promote

cooperation and exchanges of information, in particular with regard to:

(a) the promotion of decent work for all, social welfare and employment security and respect for

the principles concerning the fundamental rights at work, as per the ILO Declaration on

Fundamental Principles and Rights at Work of 1998, and of internationally recognised labour

standards and of other relevant ILO standards as well as sustained and continued efforts

towards ratifying other ILO instruments not yet ratified;

(b) the development and modernisation of labour relations, working conditions, and health and

safety at work, and the promotion of programmes in the field of labour inspection,

professional education, training and employment promotion;

(c) the development and modernisation of working relations and processes, with emphasis on the

promotion of social dialogue;

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(d) the promotion of matching skills development and labour market needs;

(e) giving priority to education and training programmes aimed at vulnerable social groups, in

respect of employment and work retraining;

(f) the creation of employment in SMEs;

(g) the development and modernisation of social protection systems and programmes;

(h) the promotion of non-discrimination between women and men, and the mainstreaming of a

gender perspective in the development of labour policy; and

(i) the coordination, in the relevant international fora, to achieve international commitments.

ARTICLE 8.16

Cooperation on education, training, youth and sport

1. The Parties agree to cooperate on formal and non-formal education, including vocational

education and training with a lifelong learning perspective. Within these fields, special attention

shall be paid to promoting inclusive and quality education and training for women and vulnerable

social groups.

2. In order to build capacities and expertise, the Parties shall promote mobility and cooperation

of their relevant stakeholders in higher education and research, and foster links between

universities, research and businesses.

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3. The Parties shall promote people-to-people contact and mutual understanding through

cooperation in the field of education, youth and sport, including financial support for the mobility of

students, PhD candidates, academic and administrative staff from higher-education institutions and

researchers, and capacity-building actions.

ARTICLE 8.17

Cultural, audio visual and media cooperation

1. The Parties shall undertake to promote cooperation in the field of culture, including cultural

heritage, with due respect for their diversity. In conformity with the Parties' respective laws and

regulations, such cooperation shall aim to enhance mutual understanding and intercultural dialogue

and foster balanced cultural exchanges and contact with relevant actors.

2. The Parties agree to cooperate in relevant international fora, such as the UN Educational,

Scientific and Cultural Organisation (hereinafter referred to as UNESCO), in order to pursue

common objectives and to foster cultural diversity, in particular through the implementation of the

UNESCO Convention on the Protection and Promotion of Diversity of Cultural Expressions.

3. The Parties shall encourage exchanges of information and experiences and shall support and

facilitate cooperation and dialogue between their relevant institutions and operators in the areas of

culture, audio-visual and media.

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ARTICLE 8.18

Regional integration

1. The Parties agree to promote the exchange of experience between both regions, with a view to

reinforcing their respective integration processes.

2. The Parties agree in particular to promote closer cooperation on integration issues between the

institutions of the Parties, as well as the sharing of expertise through meetings between staff of the

European Union and MERCOSUR institutions, regular exchanges of information, studies, joint

projects and training.

3. In order to encourage cooperation on regional and local development, priority shall be given

to:

(a) the exchange of information, and the sharing of knowledge and experiences on, inter alia,

methodologies for the formulation of regional and local development policies, on multi-level

governance and on participative governance;

(b) the implementation of regional and local development policies, particularly concerning

disadvantaged regions and areas, especially border areas;

(c) the encouragement of the development of regional infrastructure and interconnectivity.

4. Cooperation on regional and local development may include:

(a) the organisation of seminars and conferences;

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(b) training and technical assistance in the design and implementation of regional development

projects;

(c) the preparation of studies on subjects of common interest related to integration; and

(d) joint action between institutes and centres for education and training in the field of

integration.

ARTICLE 8.19

Increasing participation of Signatory MERCOSUR States

in exports of services to the European Union

Subject to the provisions of Chapter 4, the Parties agree to cooperate, including by providing

support for technical assistance, training and capacity building, with regard to, inter alia:

(a) improving the ability of service suppliers of Signatory MERCOSUR States to gather

information on and to meet regulations and standards of the EU Party at EU, national and

subnational level;

(b) improving the export capacity of service suppliers of Signatory MERCOSUR States, with

particular attention to the needs of SMEs; and

(c) establishing mechanisms for promoting investment and joint ventures between service

suppliers of the EU Party and Signatory MERCOSUR States.

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PART III

TRADE AND TRADE RELATED MATTERS

CHAPTER 9

TRADE SPECIFIC INITIAL AND INSTITUTIONAL PROVISIONS

SECTION A

TRADE SPECIFIC INITIAL PROVISIONS

ARTICLE 9.1

Establishment of a free trade area and relation to the WTO Agreement

1. The Parties to this Agreement hereby establish a free trade area, in conformity with

Article XXIV of the GATT 1994 and Article V of the GATS.

2. The Parties affirm their rights and obligations with respect to each other under

the WTO Agreement.

3. Nothing in this Part of this Agreement shall be construed as requiring a Party to act in a

manner inconsistent with its obligations under the WTO Agreement.

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ARTICLE 9.2

Objectives

The provisions of this Part of this Agreement aim at:

(a) a modern and mutually advantageous trade agreement which creates a predictable framework

to boost trade and economic activity, while promoting and protecting our shared values and

perspectives on the role of government in society, and retaining the right of the Parties to

regulate at all levels of government to achieve public policy objectives;

(b) the development of international trade and of trade between the Parties in a way as to

contribute to sustainable development in its economic, social and environmental dimensions,

consistent with, and supportive of, their respective international obligations, in these fields;

(c) the promotion of a more sustainable, equitable and inclusive economy so as to raise standards

of living, reduce poverty and create new employment opportunities;

(d) the consolidation, increase and diversification of trade in agricultural and non-agricultural

goods between the Parties, through the reduction or the elimination of tariff and non-tariff

barriers to trade and the further integration in the global value chains;

(e) the facilitation of trade in goods through, in particular, the application of the agreed

provisions regarding customs and trade facilitation, standards, technical regulations and

conformity assessment procedures as well as sanitary and phytosanitary measures;

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(f) the liberalisation and facilitation of trade in services, and the development of an environment

conducive to an increase in investment flows, competitiveness, and economic growth and, in

particular, to the improvement of conditions of establishment of businesses between

the Parties;

(g) the free movement of capital relating to direct investment and of current payments in

accordance with Chapter 18;

(h) the effective, transparent and competitive opening of government procurement markets of

the Parties;

(i) the promotion of innovation and creativity by ensuring an adequate and effective level of

protection and of enforcement of intellectual property rights, in accordance with international

rules in force between the Parties, so as to ensure the balance between the rights of the right-

holders and the public interest;

(j) the conduct of economic activities, in particular those regarding the relations between the

Parties, in conformity with the principle of free and undistorted competition;

(k) the establishment of a framework for the participation of civil society, including employers,

unions, labour and business organisations and environmental groups to support the effective

implementation of this Part of this Agreement;

(l) the establishment of an expeditious and effective dispute settlement mechanism; and

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(m) a transparent and predictable regulatory environment and efficient procedures for economic

operators, especially SMEs, while preserving the ability of the Parties to adopt and apply their

own laws and regulations that regulate economic activity in the public interest, and to achieve

legitimate public policy objectives such as the protection and promotion of public health,

social services, public education, safety, the environment, public morals, social or consumer

protection, privacy and data protection and the promotion and protection of cultural diversity.

ARTICLE 9.3

General definitions

Unless otherwise specified, for the purposes of this Part of this Agreement:

(a) "agricultural good" means a product listed in Annex 1 to the Agreement on Agriculture;

(b) "customs duty" means any duty or charge of any kind imposed on or in connection with the

importation of a good, including any form of surtax or surcharge imposed on or in connection

with such importation1, but does not include any:

(i) internal taxes or other internal charges imposed consistently with Article III of

GATT 1994;

1 Among other measures of equivalent effect, this includes ad valorem import duties,

agricultural components, additional duties on sugar content, additional duties on flour content,

specific duties, mixed duties, seasonal duties and additional duties from entry price systems.

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(ii) antidumping or countervailing duties applied in accordance with Articles VI and XVI of

GATT 1994 and the WTO Agreement on the Implementation of Article VI of

GATT 1994 and the WTO Agreement on Subsidies and Countervailing Measures in

conformity with Chapter 16;

(iii) measures applied in accordance with Article XIX of GATT 1994 and with

the WTO Safeguards Agreement, or other safeguard measures applied pursuant to

Chapter 16;

(iv) measures authorised by the WTO Dispute Settlement Body or under Chapter 29;

(v) fee or other charge, imposed consistently with Article VIII of GATT 1994; or

(vi) measures adopted to safeguard a Party's external financial position and its balance of

payments, in conformity with Article XII of GATT 1994 and the Understanding on

Balance of Payments Provisions of GATT 1994.

(c) "CPC" means the Provisional Central Product Classification (Statistical Papers Series M

No. 77, Department of International Economic and Social Affairs, Statistical Office of the

United Nations, New York, 1991);

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

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

(f) "good of a Party" means a domestic good as that is understood in the GATT 1994, and

includes originating goods of that Party;

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(g) "Harmonized System" or "HS" means the Harmonized Commodity Description and Coding

System, including its General Rules of Interpretation, Section Notes, and Chapter Notes,

done at Brussels on 14 June 1983;

(h) "heading" means the first four digits in the tariff classification number under the

Harmonized System;

(i) "juridical person" means any legal entity duly constituted or otherwise organised under

applicable law, whether for profit or otherwise, and whether privately-owned or

governmentally-owned, including any corporation, trust, partnership, joint venture, sole

proprietorship or association;

(j) "measure" includes any measure by a Party, whether in the form of a law, regulation, rule,

procedure, decision, administrative action, requirement or practice1;

(k) "natural person of a Party" means, for the European Union, a national of a Member State of

the European Union, and for MERCOSUR, a national of a Signatory MERCOSUR State, in

accordance with their respective applicable legislation;

(l) "person" means a natural person or a juridical person; and

(m) "sanitary or phytosanitary measure" means any measure as defined in Annex A to

the SPS Agreement.

1 For greater certainty, the term "measure" includes omissions and legislation that has not been

fully implemented at the conclusions of the negotiations of this Agreement as well as its

implementing acts.

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ARTICLE 9.4

WTO Agreements

(a) "ADA" means the Agreement on Implementation of Article VI of GATT 1994;

(b) "Agreement on Agriculture" means the Agreement on Agriculture, contained in Annex 1A to

the WTO Agreement;

(c) "DSU" means the Understanding on Rules and Procedures Governing the Settlement of

Disputes, contained in Annex 2 of the WTO Agreement;

(d) "GATS" means the General Agreement on Trade in Services, contained in Annex 1B to

the WTO Agreement;

(e) "GATT 1994" means the General Agreement on Tariffs and Trade 1994, contained in

Annex 1A to the WTO Agreement;

(f) "Safeguards Agreement" means the Agreement on Safeguards, contained in Annex 1A to the

WTO Agreement;

(g) "SCM Agreement" means the Agreement on Subsidies and Countervailing Measures,

contained in Annex 1A to the WTO Agreement;

(h) "SPS Agreement" means the Agreement on the Application of Sanitary and Phytosanitary

Measures, contained in Annex 1A to the WTO Agreement;

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(i) "TBT Agreement" means the Agreement on Technical Barriers to Trade, contained in

Annex 1 to the WTO Agreement;

(j) "TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property

Rights, contained in Annex 1C to the WTO Agreement; and

(k) "WTO Agreement" means the Marrakesh Agreement Establishing the World Trade

Organization, done on 15 April 1994.

ARTICLE 9.5

Parties

1. The European Union shall be responsible for the fulfilment of the commitments in this Part of

this Agreement.

2. Save where otherwise provided, each of the Signatory MERCOSUR States of this Agreement

shall be responsible for the fulfilment of the commitments in this Part of this Agreement.

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ARTICLE 9.6

Regional integration

1. While recognising the differences in their respective regional integration processes, and

without prejudice to the commitments undertaken under this Part of this Agreement, the Parties

shall foster conditions which facilitate the movement of goods and services between and within the

two regions.

2. With respect to movement of goods, pursuant to paragraph 1:

(a) goods originating in a Signatory MERCOSUR State that are released for free circulation in

the European Union shall benefit from free movement of goods within the territory of the

European Union under the conditions established by the Treaty on the Functioning of the

European Union;

(b) the Signatory MERCOSUR States shall apply to goods originating in the European Union that

are imported in its territory from another Signatory MERCOSUR State, customs procedures

that are no less favourable than those applicable to goods originating in that Signatory

MERCOSUR State.

The treatment referred to under points (a) and (b) of this paragraph does not include tariff

treatment for goods, which is governed by Chapter 10;

(c) the Signatory MERCOSUR States shall periodically review their customs procedures with a

view to facilitating the movement of goods of the European Union between their territories

and to avoiding duplication of procedures and controls when practicable and in accordance

with the evolution of their integration process; and

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(d) the benefits of MERCOSUR's harmonisation of technical regulations and conformity

assessment procedures, SPS requirements and approval procedures, including import

certificates and controls, shall be extended under non-discriminatory conditions to goods

originating in the European Union if they have been imported in compliance with the laws

and regulations of the importing Signatory MERCOSUR State.

3. With respect to movement of services, pursuant to paragraph 1:

(a) Member States of the European Union shall endeavour to facilitate, as appropriate, the

freedom to provide services within the territory of the European Union to enterprises owned

or controlled by natural or juridical persons of a Signatory MERCOSUR State and established

in a Member State of the European Union; and

(b) the Signatory MERCOSUR States shall endeavour to facilitate, as appropriate, the freedom to

provide services between their territories to enterprises owned or controlled by natural or

juridical persons of a Member State of the European Union and established in a Signatory

MERCOSUR State.

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SECTION B

TRADE SPECIFIC INSTITUTIONAL PROVISIONS

ARTICLE 9.7

Specific functions of the Joint Council acting in trade configuration

1. When the Joint Council established pursuant to Article 2.2 addresses issues related to this

Part of the Agreement, it shall have the power to:

(a) oversee the fulfilment of the objectives of this Part of the Agreement and supervise its

implementation;

(b) discuss any matter covered by this Part of the Agreement and without prejudice to Chapter 29

address any major issue arising from its implementation;

(c) take decisions and make appropriate recommendations to the Parties as provided for in this

Part of the Agreement;

(d) adopt, through decisions, interpretations of the provisions of this Part of the Agreement which

shall be binding on the Parties and all subcommittees and other bodies set up under this Part

of the Agreement, including panels established under Chapter 29;

(e) take such other action in the exercise of its functions as the Parties may agree; and

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(f) adopt decisions to amend, in fulfilment of the objectives of this Part of the Agreement:

(i) Annex 10-A in accordance with Article 10.4(9);

(ii) Appendix 10-D-1 in accordance with Article 10(6) of Annex 10-D;

(iii) Appendix 10-D-2 in accordance with Article 4(3) of Annex 10-D;

(iv) Appendix 10-D-3 in accordance with Article 5(4) of Annex 10-D;

(v) Chapter 11 in accordance with Article 11.34;

(vi) Section A of Annex 13-A in accordance with Article 13.8(9);

(vii) Annex 14-A in accordance with Article 14.18;

(viii) Annexes 20-A to 20-E in accordance with Article 20.26

(ix) Annexes 20-F to 20-J in accordance with Article 20.12;

(x) Annex 21-A in accordance with Article 21.39;

(xi) Annex 21-B in accordance with Article 21.39;

(xii) Annex 21-C in accordance with Article 21.39;

(xiii) Annex 21-E, in accordance with Article 21.39;

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(xiv) Annex 25-A, in accordance with Article 25.7;

(xv) Annexes 29-A and 29-B in accordance with Article 29.22; and

(xvi) any other provision, Annex, Appendix or Protocol, for which the possibility of such

decision is explicitly foreseen in this Part of the Agreement.

2. The decisions referred to in point (f) of paragraph 1 shall be subject to Article 30.5(2).

3. Unless the Parties agree otherwise, 3 (three) years after the entry into force of this Agreement,

and every 5 (five) years thereafter, the Joint Council in trade configuration shall initiate a review

process of Part III of this Agreement. Based on the outcome of each review, the Joint Council in

trade configuration shall deliberate on the need to amend Part III of this Agreement.

ARTICLE 9.8

Specific functions of the Joint Committee acting in trade configuration

1. When the Joint Committee established pursuant to Article 2.3 addresses issues related to this

Part of the Agreement, it shall have the power to:

(a) supervise the work of all subcommittees established in accordance with this Part of

the Agreement;

(b) explore the most appropriate way to prevent or solve any difficulty that may arise in relation

to the interpretation and application of this Part of the Agreement without prejudice to

Chapter 29;

& /en 99

(c) establish additional subcommittees, to allocate responsibilities within its competence to

subcommittees, to decide to modify the functions of the subcommittees it establishes,

including by assigning new ones, or to dissolve the subcommittees;

(d) prepare decisions for adoption by the Joint Council in trade configuration, in compliance with

the specific objectives of this Part of the Agreement, including the modifications referred to in

Article 9.7(1)(f), or adopt such decisions in the intervals between the meetings of the Joint

Council in trade configuration, or when the Joint Council in trade configuration cannot meet;

and

(e) take any other action in the exercise of its functions as the Parties may agree or as instructed

by the Joint Council in trade configuration;

(f) review the implementation of Part III of this Agreement including with a view to appraising

its impacts on employment, investment and trade between the Parties; the review shall

consider views or recommendations of civil society actors, including non-governmental

organizations, business and employers' organizations, social movements and trade unions,

taking into account in particular the provisions of Articles 2.6 to 2.8, consistent with each

Party's laws and regulations;

2. The decisions referred to in Article 2.3(7) and point (d) of paragraph 1 of this Article that

introduce amendments to this Agreement shall be subject to Article 30.5(2).

& /en 100

ARTICLE 9.9

Subcommittees

1. The Subcommittees established pursuant to paragraph 4 shall be composed of representatives

of the European Union, on the one part, and of each of the Signatory MERCOSUR States, on the

other part.

2. The subcommittees shall meet at an appropriate level at the request of a Party, and, in any

event, at least once a year. If in person, meetings shall be held alternately in Brussels and in one of

the Signatory MERCOSUR States. The subcommittees may also meet via teleconference, video-

conference or through other means, as mutually agreed by the Parties. The subcommittees shall be

co-chaired by a representative of the European Union and a representative of MERCOSUR.

3. Each subcommittee shall agree on its meeting schedule and set its agenda by mutual consent.

4. The following subcommittees are hereby established under the auspices of the Joint

Committee in trade configuration:

(a) the Subcommittee on trade in goods;

(b) the Subcommittee on trade in wine products and spirits;

(c) the Subcommittee on customs, trade facilitation and rules of origin;

(d) the Subcommittee on SPS matters;

(e) the Subcommittee on dialogues on issues related to the agri-food chain;

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(f) the Subcommittee on trade in services and establishment;

(g) the Subcommittee on government procurement;

(h) the Subcommittee on intellectual property rights; and

(i) the Subcommittee on trade and sustainable development.

5. With respect to issues related to their area of competence, the subcommittees shall have the

power to:

(a) monitor the implementation and ensure the proper functioning of this Part of the Agreement;

(b) adopt by agreement of the Parties decisions and recommendations in respect of all matters

where this Part of the Agreement so provides;

(c) discuss issues arising from the implementation of this Part of the Agreement or of any

supplementing agreement with a view to resolving them, without prejudice to Chapter 29; and

(d) provide a forum for the Parties to exchange information, including discussing best practices

and sharing implementation experience.

6. The tasks of the subcommittees are further defined as appropriate in the relevant Chapters of

this Part of the Agreement and can be modified, if necessary, by decision of the Joint Committee in

trade configuration.

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7. The subcommittees shall conduct the preparatory technical work necessary to support the

functions of the Joint Council in trade configuration and the Joint Committee in trade configuration,

including when those bodies have to adopt decisions or recommendations.

ARTICLE 9.10

Coordinators for this Part of the Agreement

1. The European Union and each Signatory MERCOSUR State shall each appoint a coordinator

for this Part of the Agreement and notify the other Party thereof within 30 (thirty) days following

the entry into force of this Agreement.

2. The coordinators shall:

(a) prepare the agenda and coordinate the preparation of the meetings of the Joint Council in

trade configuration and the Joint Committee in trade configuration meetings in accordance

with Articles 9.7 and 9.8;

(b) follow up on the decisions adopted by the Joint Council in trade configuration or the Joint

Committee in trade configuration, as appropriate;

(c) act as contact points to facilitate communication between the Parties on any matter covered by

this Part of the Agreement, unless otherwise provided in this Part of the Agreement;

& /en 103

(d) receive any notifications and information submitted under this Part of the Agreement,

including any notification or information submitted to the Joint Council in trade configuration

or the Joint Committee in trade configuration, unless otherwise provided in this Part of the

Agreement; and

(e) fulfil any other tasks as requested by the Joint Council in trade configuration or the Joint

Committee in trade configuration.

CHAPTER 10

TRADE IN GOODS

ARTICLE 10.1

Objective and scope

1 The Parties shall establish a free trade area for goods over a transitional period starting on the

date of entry into force of this Agreement.

2. Except as otherwise provided in this Part of the Agreement, the provisions of this Chapter

apply to trade in goods of a Party.

& /en 104

SECTION A

CUSTOM DUTIES

ARTICLE 10.2

National treatment

Each Party shall accord national treatment to the goods of the other Party in accordance with

Article III of GATT 1994, including its Notes and Supplementary Provisions. To that end,

Article III of GATT 1994 and its Notes and Supplementary Provisions are incorporated into and

made part of this Agreement, mutatis mutandis.

ARTICLE 10.3

Definitions

For the purposes of this Chapter, "originating good" means a good qualifying as originating in a

Party under the rules of origin set out in Chapter 11.

& /en 105

ARTICLE 10.4

Reduction and elimination of customs duties

1. Except as otherwise provided for in this Part of the Agreement, each Party shall reduce or

eliminate its customs duties on originating goods in accordance with Annex 10-A.

2. The classification of goods in trade between the Parties shall be in accordance with each

Party's respective tariff nomenclature in conformity with the Harmonized System. Each Party shall

specify in its respective Appendix to Annex 10-A the version of the Harmonized System used to

this end.

3. A Party may create a new tariff line. In that event and in so far as trade between the Parties is

concerned, the customs duty applicable to the corresponding goods under the new tariff line shall be

equal to or lower than the customs duty applicable to the corresponding goods under the original

tariff line specified in Annex 10-A and the agreed tariff concession shall remain unchanged.

4. For each good originating in the other Party, the base rate of customs duties on imports to

which the successive reductions apply under paragraph 1 is specified in Annex 10-A.

& /en 106

5. Without prejudice to paragraphs 1 and 3, for a period of 2 (two) years from the date of entry

into force of this Agreement, the European Union shall not increase the customs duties applied

on 31 December 2017 on goods originating in Paraguay that are classified under the following tariff

lines set out in Appendix 10-A-1 as "PY" goods: 20019030, 21012098, 21069098 and, 33021029.

For the purposes of this paragraph, "goods originating in Paraguay" means goods that conform to

the origin requirements under Subsections 2 and 3 of Section 2 of Chapter 1 of Title II of

Commission Delegated Regulation (EU) No 2015/2446 of 28 July of 2015 supplementing

Regulation (EU) No 952/2013 of the European Parliament and of the Council as regards detailed

rules concerning certain provisions of the Union Customs Code1 and Subsections 3 to 9 of Section 2

of Chapter 2 of Title II of Commission Implementing Regulation (EU) 2015/2447 of 24 November

2015 laying down detailed rules for implementing certain provisions of Regulation

(EU) No 952/2013 of the European Parliament and of the Council laying down the Union Customs

Code2.

6. Except as otherwise provided for in this Part of the Agreement, a Party shall not introduce

new customs duties or increase customs duties which are already applied in accordance with the

base rates set out in Annex 10-A on trade in originating goods between the Parties as from the date

of entry into force of this Agreement. For greater certainty, a Party may increase a customs duty

applicable to trade between the Parties as set out in Annex 10-A that has been unilaterally reduced

to the level set out in that Annex for the respective year following that unilateral reduction.

1 OJ EU L 343, 29.12.2015, p. 1. 2 OJ EU L 343, 29.12.2015, p. 558.

& /en 107

7. If a Party reduces its most-favoured-nation applied rate of customs duty to a level below the

base rate for a particular tariff line specified in Annex 10-A, that duty rate shall be deemed to

replace the base rate in Annex 10-A, if, and for as long as it is lower than the base rate, for the

purposes of the calculation of the preferential rate for that tariff line. In this regard, the Party shall

apply the tariff reduction to the most-favoured-nation applied rate to calculate the applicable rate of

customs duty, maintaining at all times the relative margin of preference for any tariff line. Such

relative margin of preference for a tariff line shall correspond to the difference between the base

rate set out in Annex 10-A and the applied duty rate for that tariff line in accordance with

Annex 10-A divided by that base rate and shall be expressed as a percentage.

8. Each Party may accelerate the elimination of customs duties on originating goods of the other

Party, or otherwise improve the conditions of market access for originating goods of the other Party,

if its general economic situation and the situation of the economic sector concerned so permit.

9. As from 3 (three) years after the date of entry into force of this Agreement, on request of

either Party, the Subcommittee on trade in goods, referred to in Article 10.14, shall consider

measures providing for improved market access. The Joint Council in trade configuration shall have

the power to adopt decisions to amend Annex 10-A. Such decisions shall supersede any duty rate or

staging category determined in Annex 10-A for such originating goods.

& /en 108

ARTICLE 10.5

Goods re-entered after repair

1. For the purposes of this Article, "repair" means any processing operation undertaken on a

good to remedy operating defects or material damage and entailing the re-establishment of the good

to its original function or to ensure its compliance with technical requirements for its use, without

which the good could no longer be used in the normal way for the purposes for which it was

intended. Repair of a good includes restoration and maintenance but does not include an operation

or process that:

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

good;

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

(c) is used to improve the technical performance of a good.

2. A Party shall not apply customs duties to a good, regardless of its origin, that re-enters that

Party's customs territory after hat good has been temporarily exported from its customs territory to

the customs territory of the other Party for repair, regardless of whether such repair could have been

performed in the customs territory of the Party from which the goods were exported for repair as

defined in paragraph 1.

3. Paragraph 2 does not apply to a good imported in bond into free-trade zones or zones of

similar status, that is exported for repair and is not re-imported in bond into free-trade zones or

zones of similar status.

& /en 109

4. A Party shall not apply customs duties to a good, regardless of its origin, imported

temporarily from the customs territory of the other Party for repair.

SECTION B

NON-TARIFF MEASURES

ARTICLE 10.6

Fees and other charges on imports and exports

1. Each Party shall ensure, in accordance with Article VIII of GATT 1994, including its Notes

and Supplementary Provisions, that all fees and other charges of whatever character1, other than

import and export duties imposed on or in connection with importation or exportation, are limited in

amount to the approximate cost of services rendered, shall not be calculated on an ad valorem basis

and shall not represent an indirect protection for domestic goods or a taxation of imports or exports

for fiscal purposes.

2. Each Party may impose charges or recover costs only if specific services are rendered, in

particular for the following:

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

than customs premises;

1 For greater certainty, "tasa consular" of the Oriental Republic of Uruguay and "tasa

estadística" of the Argentine Republic are governed by paragraph 3.

& /en 110

(b) analyses or expert reports on goods and postal fees for the return of goods to an applicant,

particularly in respect of decisions relating to binding information or the provision of

information concerning the application of customs laws and regulations;

(c) the examination or sampling of goods for verification purposes, or the destruction of goods, if

costs other than the cost of using customs staff are involved; or

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

potential risk.

3. A Party shall not require consular transactions, including related fees and charges, in

connection with the importation of goods from the other Party. The Parties shall have a transitional

period of 3 (three) years from the date of entry into force of this Agreement to fulfil the

requirements of this paragraph1.

4. Each Party shall publish a list of the fees and charges it imposes in connection with the

importation or exportation of goods.

1 Notwithstanding this paragraph, for the Republic of Paraguay the transitional period will

be 10 (ten) years after the date of entry into force of this Agreement.

& /en 111

ARTICLE 10.7

Import and export licensing procedures

1. The Parties shall ensure that all import and export licensing procedures applicable to trade in

goods between the Parties are neutral in application and administered in a fair, equitable, non-

discriminatory and transparent manner.

2. Each Party shall only adopt or maintain licensing procedures as a condition for importation

into its territory from that of the other Party or exportation from its territory to that of the other

Party if other appropriate procedures to achieve an administrative purpose are not reasonably

available.

3. The Parties shall not adopt or maintain non-automatic import or export licensing procedures1

unless it is necessary to implement a measure that is consistent with this Part of the Agreement.

A Party adopting non-automatic import or export licensing procedures shall indicate clearly the

measure being implemented through such licensing procedure.

1 For the purposes of this Article, "non-automatic import or export licensing procedures" is

defined as licensing procedures where approval of the application is not granted for all legal

and natural persons who fulfil the requirements of the Party concerned for engaging in the

importation or exportation of goods subject to licensing procedures.

& /en 112

4. The Parties shall introduce and administer any licensing procedures in accordance with

Articles 1 to 3 of the WTO Import Licensing Agreement (hereinafter referred to as "Import

Licensing Agreement"). To that end, Articles 1 to 3 of the Import Licensing Agreement are

incorporated into and made part of this Agreement, mutatis mutandis, and shall apply to any export

licensing procedures.

5. Any Party introducing or modifying any import and export licensing procedures shall make

the relevant information available on an official website. This information shall be made available,

whenever practicable, 21 (twenty-one) days prior to the date of the application of the introduction

of, or modification to, licensing procedures but in any event no later than such date. The

information available on the Internet shall contain the data required under Article 5 of the Import

Licensing Agreement. Each Party shall notify the other Party of any introduction or modification of

export licensing procedures and such notification shall contain the same information as referred to

in Article 5 of the Import Licensing Agreement.

6. On request of a Party, the other Party shall promptly provide any relevant information

regarding any import and or export licensing procedures that the Party to which the request is

addressed intends to adopt or has adopted or maintained, including the information referred to in

Articles 1 to 3 of the Import Licensing Agreement, mutatis mutandis.

& /en 113

ARTICLE 10.8

Export competition

1. The Parties affirm their commitments expressed in the Export Competition Ministerial

Decision of 19 December 2015 (WT/MIN(15)/45, WT/L/980) of the WTO (hereinafter referred to

as the "Export Competition Ministerial Decision").

2. For the purposes of this Article, "export subsidies" means subsidies within the meaning of

Articles 1 and 3 of the SCM Agreement that are contingent upon export performance, including the

subsidies listed in Annex I to the SCM Agreement and the subsidies listed in Article 9 of the

Agreement on Agriculture.

3. A Party shall not maintain, introduce or reintroduce export subsidies on an agricultural good

that is exported or incorporated in a product that is exported.

4. A Party shall not maintain, introduce or reintroduce export credits, export credit guarantees,

insurance programmes, state trading enterprises or international food aid, or other measures that

have an effect equivalent to an export subsidy, on an agricultural good that is exported or

incorporated in a good that is exported to the territory of the other Party, unless those measures

comply with the obligations of the exporting Party under the WTO Agreements and Decisions of

the Ministerial Conference and the General Council of the WTO, including in particular the Export

Competition Ministerial Decision.

& /en 114

5. The Parties affirm their commitment in the Bali Ministerial Declaration adopted on 7

December 2013 (WT/MIN(13)/DEC) of the WTO, strengthened by the Export Competition

Ministerial Decision, to enhance transparency and to improve monitoring in relation to all forms of

export subsidies and export credits, export credit guarantees, insurance programmes, state trading

enterprises and international food aid, as well as other measures that have an effect equivalent to an

export subsidy.

6. The Parties affirm the commitments taken under the Export Competition Ministerial Decision

with regard to international food aid and shall work together to encourage the best practice in the

delivery of food aid in the relevant international fora by seeking to limit the monetisation of food

aid and the delivery of in-kind food aid only to emergency situations.

ARTICLE 10.9

Duties, taxes and other fees and charges on exports

A Party shall not introduce or maintain any duties or charges of any kind on or in connection with

the exportation of a good to the other Party, other than in accordance with Annex 10-B,

3 (three) years from the date of entry into force of this Agreement.

& /en 115

ARTICLE 10.10

State trading enterprises

1. Nothing in this Part of the Agreement shall prevent a Party from maintaining or establishing a

state trading enterprise in accordance with Article XVII of GATT 1994, including its Notes and

Supplementary Provisions and the WTO Understanding on the Interpretation of Article XVII of

GATT 1994, which are incorporated into and made part of this Part of the Agreement,

mutatis mutandis.

2. If a Party requests information from the other Party on individual cases of state trading

enterprises, their operation or the effect of their operations on bilateral trade, the requested Party

shall ensure full transparency in accordance with Article XVII of GATT 1994.

3. Notwithstanding paragraph 1, a Party shall not designate or maintain a designated import or

export monopoly, except for those already established by a Party or prescribed by in its Constitution

as listed in Annex 10-C. For the purposes of this paragraph, an import or export monopoly means

the exclusive right or grant of authority by a Party to an entity to import a good from, or to export a

good to, the other Party.

& /en 116

ARTICLE 10.11

Prohibition of quantitative restrictions

1. A Party may not adopt or maintain any prohibition or restriction on the importation of any

good from the other Party or on the exportation or sale for export of any good destined for the other

Party, whether applied by quotas, licences or other measures, except in accordance with Article XI

of GATT 1994, including its Notes and Supplementary Provisions. To that end, Article XI of

GATT 1994 and its Notes and Supplementary Provisions are incorporated into and made part of this

Part of the Agreement, mutatis mutandis.

2. A Party may not adopt or maintain export or import price requirements, except as permitted in

the enforcement of antidumping and countervailing duty orders or price undertakings.

ARTICLE 10.12

Preference utilisation

1. For the purpose of monitoring the functioning of this Part of the Agreement and calculating

preference utilisation rates, the Parties shall annually exchange import statistics for a period

starting 1 (one) year after the date of entry into force of this Agreement and ending 10 (ten) years

after the tariff elimination is completed for all goods in accordance with Annex 10-A. Unless the

Joint Committee in trade configuration decides otherwise, this period shall be automatically

extended for 5 (five) years, and the Joint Committee in trade configuration may decide to further

extend it.

& /en 117

2. The exchange of import statistics referred to in paragraph 1 shall cover data pertaining to the

most recent year available, including value and, if applicable, volume, at the tariff line level for

imports of goods of the other Party benefitting from preferential duty treatment under this Part of

the Agreement and those that received non-preferential treatment.

3. Without prejudice to paragraph 2 and subject to confidentiality requirements under each

Party's laws and regulations a Party shall not be obliged to exchange import statistics.

ARTICLE 10.13

Specific measures concerning the management of preferential treatment

1. The Parties shall cooperate in preventing, detecting and combating breaches of their laws and

regulations, irregularities and fraud related to the preferential treatment granted under this Chapter,

in accordance with Chapter 11 and Annex 12-A.

2. A Party may, in accordance with the procedure laid down in paragraph 4, decide to

temporarily suspend the relevant preferential treatment of the products concerned, if that Party

makes a finding, based on objective, compelling and verifiable information, that:

(a) large-scale systematic breaches in the relevant laws and regulations, irregularities or fraud

have been committed in order to obtain preferential tariff treatment granted under this

Chapter; and

(b) the other Party systematically refuses or otherwise fails to comply with its obligations referred

to in paragraph 1, in accordance with Chapter 11 and Annex 12-A.

& /en 118

3. For the purposes of this Article, a failure to comply with the obligations referred to in

paragraph 1 means, among others, a clearly demonstrated and systematic:

(a) failure to fulfil the obligation to verify the originating status of the products concerned, in

accordance with the procedures established in Articles 11.24 and 11.25 and;

(b) refusal or unjustifiable delay in communicating the result of a verification of origin carried

out in accordance with Articles 11.25 and 11.26; or

(c) lack of administrative cooperation pursuant to Annex 12-A.

4. The Party which has made a finding referred to in paragraph 2 shall, without undue delay,

notify the Joint Committee in trade configuration thereof and provide it with the information that

constitutes the basis for its finding.

5. When the requirements of paragraph 4 are fulfilled, the Party which has made a finding shall

enter into consultations with the other Party, in the Joint Committee in trade configuration, with a

view to reaching a solution that is acceptable to both Parties. If the Parties fail to agree on a

mutually acceptable solution within 3 (three) months after the date of notification, the Party which

has made the finding may decide to suspend temporarily the relevant preferential treatment of the

products concerned. In such cases, the Party which has made the finding shall notify the temporary

suspension to the Joint Committee in trade configuration without undue delay.

& /en 119

6. A decision to suspend temporarily the relevant preferential treatment of the product concerned

pursuant to paragraph 4 shall apply only for a period commensurate with the impact on the financial

interests of the Party concerned and not for longer than 3 (three) months. If it can be objectively and

verifiably ascertained that the conditions that gave rise to that decision to suspend persist at the

expiry of the suspension period, the Party concerned may decide to renew that decision to suspend

for an equal period of time. Any suspension shall be subject to periodic consultations in the

Joint Committee in trade configuration. In case of renewal, consultations shall take place in the

Joint Committee in trade configuration at least 15 (fifteen) days prior to the expiry of the

suspension period.

7. Each Party shall publish, in accordance with its internal procedures, notices to importers about

any notification of a finding pursuant to paragraph 4 and decision to suspend temporarily referred to

in paragraphs 5 and 6.

& /en 120

SECTION C

INSTITUTIONAL PROVISIONS

ARTICLE 10.14

Subcommittee on trade in goods

1. The Subcommittee on trade in goods, established pursuant to Article 9.9(4), shall have the

following functions, in addition to those listed in Articles 2.4, 9.9 and 13.14:

(a) promote trade in goods between the Parties;

(b) evaluate annually the use and the administration of quotas and of preferences granted by this

Part of the Agreement; and

(c) discuss, clarify and address any technical issues that may arise between the Parties on matters

related to the application of each Party's tariff nomenclature as defined in paragraphs 3 and 4

of Annex 10-A.

& /en 121

ARTICLE 10.15

Subcommittee on trade in wine products and spirits

1. The Subcommittee on trade in wine products and spirits, established pursuant to

Article 9.9(4), shall have the following functions, in addition to those listed in Articles 2.4 and 9.9:

(a) ensure the timely notification of amendments to laws and regulations on matters covered by

Annex 10-D that have an impact on wine products and spirits traded between the Parties; and

(b) adopt decisions to determine the details of the rules set out in paragraph 2 of

Appendix 10-D-3, in particular the forms to be used and the details of the information to be

provided in the analysis report.

ARTICLE 10.16

Cooperation on trade in wine products and spirits and focal points

1. The Parties shall cooperate on and address issues related to trade in wine products and spirits,

in particular:

(a) product definitions, certification and labelling of wine products;

(b) the use of vine varieties in winemaking and the labelling thereof; and

(c) product definitions, certification and labelling of spirits.

& /en 122

2. The Parties shall closely cooperate and seek ways to improve assistance to each other in the

application of Annex 10-D, in particular in order to combat fraudulent practices.

3. To facilitate mutual assistance between the enforcement bodies and authorities of the Parties

as regards matters covered by this Annex, each Party shall designate the bodies and authorities

responsible for the application and enforcement of Annex 10-D. If a Party designates more than one

competent body or authority, it shall ensure that the work of those bodies and authorities is

coordinated. In such cases, a Party shall also designate a single liaison body or authority that serves

as the single focal point for the body or authority of the other Party.

4 The Parties shall, via the Subcommittee on trade in wine products and spirits, inform each

other of the contact details of the bodies, authorities and focal points referred to in in paragraph 3 no

later than 6 (six) months after the date of entry into force of this Agreement. The Parties shall

inform each other of any changes of the contact details to such bodies, authorities and focal points.

& /en 123

CHAPTER 11

RULES OF ORIGIN AND ORIGIN PROCEDURES

SECTION A

RULES OF ORIGIN

ARTICLE 11.1

Definitions

For the purposes of this Chapter:

(a) "classified" refers to the classification of a product or material under a particular section,

Chapter, heading or subheading of the Harmonized System;

(b) "consignment" means products which are either sent simultaneously from one exporter to one

consignee or covered by a single transport document covering their shipment from the

exporter to the consignee or, in the absence of such a document, by a single invoice;

& /en 124

(c) "customs authority or competent governmental authority" refers to:

(i) in the European Union, the services of the European Commission responsible for

customs matters, and the customs administrations and any other authorities of the

Member States of the European Union responsible for the application and enforcement

of customs legislation; and

(ii) in MERCOSUR, the competent authorities of the Signatory MERCOSUR States or their

successors, as listed below:

(A) Argentina: Secretaría de Industria y Gestión Comercio of the Ministerio de

Economía;

(B) Brazil: Secretaria de Comércio Exterior do Ministério do Desenvolvimento,

Indústria, Comércio e Serviços and Secretaria Especial da Receita Federal do

Brasil of the Ministério da Fazenda;

(C) Paraguay: Subsecretaría de Estado de Comercio y Servicios of the Ministerio de

Industria y Comercio; and

(D) Uruguay: Asesoría de Política Comercial of the Ministerio de Economía y

Finanzas;

(d) "exporter" means a person located in a Party who exports the originating product and makes

out a statement on origin;

& /en 125

(e) "fungible materials" means materials that are of the same kind and commercial quality, with

the same technical and physical characteristics, and which cannot be distinguished from one

another once they are incorporated into the product;

(f) "goods" means both materials and products;

(g) "importer" means a person who imports the originating product and claims preferential tariff

treatment for it;

(h) "manufacture" means any kind of working or processing, including assembly or specific

operations;

(i) "material" means any ingredient, raw material, component or part used in the manufacture of

a product; and

(j) "product" means the product being manufactured, even if it is intended for later use in another

manufacturing operation.

& /en 126

ARTICLE 11.2

General requirements

1. For the purposes of applying the preferential tariff treatment by a Party to the originating

goods of the other Party in accordance with this Part of the Agreement, the following products shall

be considered as originating in the European Union, provided that they satisfy all other applicable

requirements in this Chapter:

(a) products wholly obtained in the European Union pursuant to Article 11.4;

(b) products obtained in the European Union exclusively from originating materials; or

(c) products obtained in the European Union incorporating non-originating materials, provided

that they have fulfilled the conditions set out in Annex 11-B.

2. For the purposes of applying the preferential tariff treatment by a Party to the originating

goods of the other Party in accordance with this Part of the Agreement, the following products shall

be considered as originating in MERCOSUR, provided that they satisfy all other applicable

requirements in this Chapter:

(a) products wholly obtained in MERCOSUR pursuant to Article 11.4;

(b) products obtained in MERCOSUR exclusively from originating materials; or

(c) products obtained in MERCOSUR incorporating non-originating materials, provided that they

have fulfilled the conditions set out in Annex 11-B.

& /en 127

3. If a product has acquired originating status, the non-originating materials used in the

manufacture of that product shall not be considered non-originating if that product is incorporated

into another product as a material.

ARTICLE 11.3

Bilateral cumulation of origin

1. Products originating in the European Union shall be considered as materials originating in

MERCOSUR when incorporated into a product obtained there, provided that they have undergone

working or processing going beyond the operations referred to in Article 11.6.

2. Products originating in MERCOSUR shall be considered as materials originating in the

European Union when incorporated into a product obtained there, provided that they have

undergone working or processing going beyond the operations referred to in Article 11.6.

ARTICLE 11.4

Wholly obtained products

1. The following shall be considered as wholly obtained products in the European Union or in

MERCOSUR:

(a) mineral products and other natural substances extracted from their soil or from their seabed;

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

& /en 128

(c) live animals born and raised there;

(d) products from live animals raised there;

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

(f) products obtained through hunting or fishing conducted there;

(g) products of aquaculture where the fish, crustaceans, molluscs and other aquatic invertebrates

are born and raised there;

(h) products of fishing and other products taken from the sea by their vessels1;

(i) products made aboard their factory ships exclusively from products referred to in point (h);

(j) mineral products and other non-living natural resources, taken or extracted from the seabed,

subsoil or ocean floor of:

(i) the exclusive economic zone of Signatory MERCOSUR States or of Member States of

the European Union, as determined by their laws and regulations and in accordance with

Part V of UNCLOS;

(ii) the continental shelf of Signatory MERCOSUR States or of Member States of the

European Union, as determined by their laws and regulations and in accordance with

Part VI of UNCLOS; or

1 This point is without prejudice to the sovereign rights and obligations of the Parties under

UNCLOS in particular within the exclusive economic zone and continental shelf.

& /en 129

(iii) the Area, as defined in Article 1(1) of UNCLOS, where a Party or a person of a Party

has exclusive exploitation rights, in accordance with Part XI of UNCLOS and the

Agreement relating to the implementation of Part XI of UNCLOS;

(k) used articles collected there fit only for the recovery of raw materials;

(l) waste and scrap resulting from manufacturing operations conducted there1; or

(m) goods produced there exclusively from the products specified in points (a) to (l).

2. The terms "their vessels" and "their factory ships" in points (h) and (i) of paragraph 1 apply

only to vessels and factory ships which:

(a) are registered in a Member State of the European Union or in a Signatory MERCOSUR State

and, where appropriate, have fishing licences issued by a Signatory MERCOSUR State or the

European Union in the name of fishing companies duly registered to operate in that Member

State of the European Union or that Signatory MERCOSUR State;

1 Points (k) and (l) are without prejudice to each Party's laws and regulations regarding the

import of the goods mentioned therein.

& /en 130

(b) sail under the flag of the same registering Member State of the European Union or Signatory

MERCOSUR State1; and

(c) meet one of the following conditions:

(i) they are at least 50 % (fifty per cent) owned by one or more natural persons2 of

the Parties;

(ii) they are owned by juridical persons3:

(A) which have their head office and their main place of business in a Party; and

(B) in which at least 50 % (fifty per cent) of the ownership belongs to natural persons

or juridical persons of the Parties; or

(iii) at least a minimum of two thirds of the crew are natural persons of the Parties.

1 Products of fishing or other products taken from the sea by chartered vessels sailing under the

flag of a Member State of the European Union or a Signatory MERCOSUR State are

considered to originate in the Member State of the European Union or the Signatory

MERCOSUR State in which the vessel is chartered and the license is issued, provided that

they fulfil all criteria in this paragraph. 2 For the purposes of this Article, the definition of point (m) of Article 18.2 applies. 3 For the purposes of this Article, the definition of point (h) of Article 18.2 applies.

& /en 131

ARTICLE 11.5

Tolerances

1. If a non-originating material used in the manufacture of a product does not satisfy the

requirements set out in Annex 11-B, such product shall nonetheless be considered as originating in

a Party if:

(a) the total value of non-originating materials does not exceed 10 % (ten per cent) of the

ex-works price of the product; and

(b) any of the percentages for the maximum value or weight of non-originating materials set out

in Annex 3-B are not exceeded through the application of this paragraph.

2. Paragraph 1 does not apply to products falling within Chapters 50 to 63 of the Harmonized

System, for which the tolerances set out in Notes 6 and 7 of Annex 11-A apply.

ARTICLE 11.6

Insufficient working or processing operations

1. Notwithstanding point (c) of Article 11.2(1) and point (c) of Article 11.2(2), a product shall

not be considered as originating in a Party if the manufacture of that product consists only of the

following operations conducted on non-originating materials in that Party:

(a) preserving operations to ensure that the products remain in good condition during transport

and storage;

& /en 132

(b) changes of packaging and breaking-up and assembly of packages;

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

(d) ironing or pressing of textiles;

(e) simple painting and polishing operations;

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

(g) operations to colour or flavour sugar or form sugar lumps, and partial or total milling of

crystal sugar;

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

(i) sharpening, simple grinding, separating or simple cutting;

(j) sifting, screening, sorting, classifying, grading and matching, including the making-up of sets

of articles;

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

other simple packaging operations;

(l) affixing or printing marks, labels, logos and other similar signs on products or their

packaging;

(m) simple mixing of products, whether or not of different kinds, and simple mixing of sugar with

any material;

& /en 133

(n) simple assembly of non-originating parts to constitute a complete product, or disassembly of

products into parts;

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

(p) a combination of two or more operations specified in points (a) to (o); or

(q) slaughter of animals.

2. For the purposes of paragraph 1, operations shall be considered simple if neither special skills

nor machines, apparatus or tools specially produced or installed for those operations are required for

their performance.

ARTICLE 11.7

Unit of qualification

1. The unit of qualification for the application of this Chapter shall be the particular product as

classified in accordance with the Harmonized System.

2. For a product composed of a group or assembly of articles which is classified under a single

heading of the Harmonized System, the whole constitutes the unit of qualification.

3. For a consignment consisting of a number of identical products classified under the same

heading of the Harmonized System, each product shall be taken individually when applying

this Chapter.

& /en 134

ARTICLE 11.8

Packaging materials, packing materials and containers

1. If, under General Rule 5 for the Interpretation of the Harmonized System, packaging is

included with the product for classification purposes, it shall be included for the purposes of

determining origin.

2. Packing materials and containers for shipment that are used to protect products during

transportation shall be disregarded in determining the origin of such products.

ARTICLE 11.9

Accessories, spare parts and tools

Accessories, spare parts and tools dispatched with a piece of equipment, machine, apparatus or

vehicle which are customary for that product and included in the price thereof or which are not

separately invoiced shall be regarded as one product with the piece of equipment, machine,

apparatus or vehicle in question.

& /en 135

ARTICLE 11.10

Accounting segregation

1. If originating and non-originating fungible materials are used in the manufacture of a product,

those materials shall be physically segregated, according to their origin, during storage in order for

the originating materials to maintain their originating status.

2. Notwithstanding paragraph 1, physical segregation of originating and non-originating

fungible materials is not needed in the manufacture of a product if the origin of such product is

determined pursuant to the accounting segregation method for managing stocks.

3. The accounting segregation shall be recorded and applied in accordance with the generally

accepted accounting principles applicable in the Party in which the product is manufactured.

4. The accounting segregation method may be used only if it can be ensured that, at any time, no

more products receive originating status than would be the case if the materials had been physically

segregated.

5. A Party may require that the application of the accounting segregation method be subject to

prior authorisation by the relevant competent authorities. The competent authorities may grant

authorisation subject to any conditions deemed appropriate and, in such cases, they shall monitor

the use of the authorisation. Those authorities may withdraw the authorisation at any time if the

beneficiary of the authorisation makes improper use of the accounting segregation method in any

manner or fails to fulfil any of the other conditions laid down in this Chapter.

& /en 136

ARTICLE 11.11

Sets

Sets, as defined in General Rule 3 for the Interpretation of the Harmonized System, shall be

regarded as originating if all their component products are originating. Nevertheless, if a set

is composed of originating and non-originating products, the set as a whole shall be regarded

as originating, provided that the value of the non-originating products does not

exceed 15 % (fifteen per cent) of the ex-works price of the set.

ARTICLE 11.12

Neutral elements

In order to determine whether a product is originating, it is not necessary to determine the origin of

the following elements used in its manufacture:

(a) energy and fuel;

(b) plant and equipment;

(c) machines and tools; or

(d) goods which do not enter and which are not intended to enter into the final composition of

the product.

& /en 137

ARTICLE 11.13

Principle of territoriality

1. The conditions set out in this Chapter relating to the acquisition of originating status shall be

fulfilled without interruption in the European Union or MERCOSUR.

2. If originating goods exported from the European Union or MERCOSUR to a third country are

returned, they shall be considered to be non-originating unless it can be demonstrated to the

satisfaction of the customs authorities that the goods returned:

(a) are the same as those exported; and

(b) have not undergone any operation beyond that necessary to preserve them in good condition

while in that third country or while being exported.

ARTICLE 11.14

Transport conditions

1. The products declared for importation into a Party shall be the same products as exported

from the Party in which they are considered originating. They shall not have been altered,

transformed in any way or subjected to operations other than those to preserve them in good

condition or to add or affix marks, labels, seals or any other distinguishing signs, in order to ensure

compliance with specific domestic requirements of the importing Party, prior to being declared

for import.

& /en 138

2. Storage of products or consignments and splitting of consignments may take place if carried

out under the responsibility of the exporter or of a subsequent holder of the goods, and if the

products remain under customs supervision in the country or countries of transit.

3. In case of doubt as to whether the requirements provided for in paragraphs 1 and 2 are

complied with, the customs authorities of the importing Party may request the importer to provide

evidence of compliance, which may be given by any means, including contractual transport

documents such as bills of lading, factual or concrete evidence based on marking or numbering of

packages or any evidence related to the product itself.

ARTICLE 11.15

Exhibitions

1. Originating products sent for exhibition in a third country and sold after the exhibition for

importation into the European Union or MERCOSUR shall benefit on importation from the

provisions of this Part of the Agreement if it is shown to the satisfaction of the customs authorities

of the importing Party that:

(a) an exporter has consigned the products from the European Union or MERCOSUR to

the third country in which the exhibition is held and has exhibited them there;

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

European Union or MERCOSUR;

& /en 139

(c) the products have been consigned during the exhibition or immediately thereafter in the state

in which they were sent for exhibition; and

(d) the products have not, since they were consigned for exhibition, been used for any purpose

other than demonstration at the exhibition.

2. A statement on origin shall be made out pursuant to Section B and submitted to the customs

authorities of the importing Party. The name and address of the exhibition shall be indicated

thereon.

3. Paragraph 1 applies to any trade, industrial, agricultural or crafts exhibition, fair or similar

public show or display which is organised for purposes other than private purposes in shops or

business premises with a view to the sale of foreign products, and during which the products remain

under customs control.

& /en 140

SECTION B

ORIGIN PROCEDURES

ARTICLE 11.16

General requirements

Products originating in the European Union on importation into MERCOSUR, and products

originating in MERCOSUR on importation into the European Union, shall benefit from preferential

tariff treatment under this Part of the Agreement upon submission of a statement on origin in

accordance with Article 11.17 and each Party's laws and regulations1.

ARTICLE 11.17

Conditions for making out a statement on origin

1. A statement on origin as referred to in Article 11.16 may be made out by:

(a) an exporter in accordance with the relevant laws and regulations of the Party of export; or

1 A certificate of origin will be valid in accordance with the transitional measures contained in

Annex 11-D, for the time period specified therein.

& /en 141

(b) any exporter for any small consignment consisting of one or more packages containing

originating products whose total value does not exceed the threshold stipulated in the relevant

laws and regulations of the Party of export.

2. The Parties shall exchange information on the relevant laws and regulations as referred to in

paragraph 1:

(a) on the date of entry into force of this Agreement;

(b) if there are any modifications to such laws and regulations, prior to the entry into force of

such modifications; and

(c) on request of either Party, at any time after the entry into force of this Agreement.

3. A statement on origin may be made out if the products concerned are products originating in

the European Union or MERCOSUR and fulfil the other requirements of this Chapter.

4. The exporter making out a statement on origin shall be prepared to submit at any time, at the

request of the customs authorities or competent governmental authorities of the Party of export, all

appropriate documents proving the originating status of the products concerned and the fulfilment

of the other requirements of this Chapter.

5. The exporter shall make out a statement on origin on the invoice, the delivery note, or any

other commercial document that describes the originating product in sufficient detail to enable its

identification using one of the language versions set out in Annex 11-C and in accordance with the

laws and regulations of the Party of export.

& /en 142

6. A statement on origin shall bear the original, handwritten signature of the exporter unless

otherwise provided in the relevant laws and regulations of the Party of export.

7. A statement on origin may be made out by the exporter when the products to which it relates

are exported, or after exportation provided that it is presented in the Party of import no later

than 2 (two) years after the importation of the products to which it relates.

ARTICLE 11.18

Validity of a statement on origin

1. A statement on origin shall be valid for 12 (twelve) months from the date on which it was

made out by the exporter, and shall be submitted within that time period to the customs authorities

of the Party of import.

2. Statements on origin submitted after the time period specified in paragraph 1 may be accepted

for the purposes of applying preferential treatment only if the failure to submit them within that

time period was due to exceptional circumstances.

3. In other cases of belated submission, the customs authorities of the Party of import may

accept the statement on origin if the products have been submitted before the final date.

& /en 143

ARTICLE 11.19

Importation by instalments

If, at the request of the importer and subject to the conditions set by the customs authorities of the

Party of import, dismantled or non-assembled products within the meaning of General Rule 2(a) for

the Interpretation of the Harmonized System that are classified within Sections XV to XXI of the

Harmonized System are imported by instalments, a single statement on origin for such products

shall be submitted to the customs authorities upon importation of the first instalment.

ARTICLE 11.20

Exemptions from a statement on origin

1. Products sent as small packages from private persons to private persons or forming part of

travellers' personal luggage shall be admitted as originating products without requiring the

submission of a statement on origin if such products are not imported by way of trade and have

been declared as meeting the requirements of this Chapter, and if there is no doubt as to the veracity

of the declaration. In the case of products sent by post, the declaration can be made on the customs

declaration CN22/CN23 or on a sheet of paper annexed to that document.

2. Imports which are occasional and consist solely of products for the personal use of the

recipients or travellers or their families shall not be considered to be imports by way of trade if it is

evident from the nature and quantity of the products that no commercial purpose is intended.

& /en 144

3. The total value of the products referred to in paragraph 1 shall not exceed the values

stipulated in the laws and regulations of the Party of import. The Parties shall exchange information

on those values.

ARTICLE 11.21

Supporting documents

The documents referred to in Article 11.17(4) may include:

(a) direct evidence of the processes carried out by the exporter or supplier to obtain the goods

concerned, contained, for example, in their accounts or internal book-keeping;

(b) documents proving the originating status of materials used, issued or made out in the

European Union or MERCOSUR, if those documents are used, issued or made out in

accordance with that Party's laws and regulations;

(c) documents proving the working or processing of materials in the European Union or

MERCOSUR, issued or made out in the European Union or MERCOSUR, if those documents

are used, issued or made out in accordance with that Party's laws and regulations; and

(d) a statement on origin proving the originating status of materials used made out in the

European Union or MERCOSUR in accordance with this Chapter.

& /en 145

ARTICLE 11.22

Record-keeping requirements

The exporter making out a statement on origin shall keep, for at least 3 (three) years as of the date

of making out the statement on origin, a copy of that statement on origin and of the documents

referred to in Article 11.17(4). The importer shall keep that statement of origin, or a copy thereof if

the original is held by the customs authority or competent governmental authority, for at

least 3 (three) years as of the date of importation of the products to which that statement on origin

refers.

ARTICLE 11.23

Discrepancies and formal errors

1. Slight discrepancies between the statements on origin and the documents submitted to the

customs office for the purposes of carrying out the formalities for importing the products shall not

render the statement on origin null and void if it is duly established that the statement on origin

corresponds to the products submitted.

2. Obvious formal errors on a statement on origin shall not cause the statement on origin to be

rejected if such errors do not create doubts concerning the correctness of the information contained

in the statement on origin.

& /en 146

ARTICLE 11.24

Cooperation between customs authorities and competent governmental authorities

1. The customs authorities or competent governmental authorities of the Member States of the

European Union and of the Signatory MERCOSUR State shall provide each other, by means of

communication between the European Commission and the Secretariat of MERCOSUR, with the

addresses of the customs authorities or competent governmental authorities responsible for

verifying statements on origin.

2. In order to ensure the proper application of this Chapter, the European Union and

MERCOSUR shall assist each other, through their customs authorities or competent governmental

authorities, in checking the authenticity of statements on origin and the correctness of the

information given in these statements.

3. To prevent, investigate and combat breaches of customs legislation, Annex 12-A provides for

cooperation between customs authorities or competent governmental authorities, including the

presence of duly authorised officials of one Party in the territory of the other, subject to the

agreement of and the conditions set by the Party in whose territory the assistance is being given.

& /en 147

ARTICLE 11.25

Verification of statements on origin

1. Verifications of statements on origin shall be carried out at random or whenever the customs

authorities or competent governmental authorities of the Party of import have reasonable doubts as

to the authenticity of such statements, the originating status of the products concerned or the

fulfilment of the other requirements of this Chapter.

2. For the purposes of implementing paragraph 1, the customs authorities or competent

governmental authorities of the Party of import shall return the statement on origin, or a copy

thereof, to the customs authorities or competent governmental authorities of the Party of export,

providing the reasons for the request of verification. Any documents or information obtained

suggesting that the information provided on the statement on origin is incorrect shall be included in

support of the request for verification.

3. The request for verification and the subsequent reply shall be submitted in an official

language of the customs authority or competent governmental authority of the Party of import

requesting the verification, in a language acceptable to that Party or in accordance with Article 5(3)

of Annex 12-A.

4. The verification shall be carried out by the customs authorities or competent governmental

authorities of the Party of export. For this purpose, they have the authority to call for any evidence

and to carry out any inspections of the exporter's accounts or any other check that they consider

appropriate.

& /en 148

5. If the customs authorities or competent governmental authorities of the Party of import decide

to suspend the granting of preferential treatment to the products concerned while awaiting the

results of the verification, they shall offer to release the products to the importer subject to any

precautionary measures that the customs authorities or competent governmental authorities deem

necessary. Any suspension of preferential treatment shall be terminated as soon as possible after the

Party of import has determined the origin of the products.

6. The customs authorities or competent governmental authorities of the Party of export shall

inform the authorities of the Party of import requesting the verification of the results thereof as soon

as possible. The Party of export shall provide to the customs authorities or competent governmental

authorities of the Party of import the following information:

(a) the results of the verification;

(b) a description of the product subject to verification and the tariff classification relevant for the

application of the rules of origin;

(c) a description and explanation of the manufacture sufficient to support the rationale concerning

the originating status of the product;

(d) information on the manner in which the verification was conducted; and

(e) if appropriate, supporting documentation.

& /en 149

7. If there is no reply within 10 (ten) months of the date of the verification request or if the reply

does not contain sufficient information to determine the authenticity of the statement in question or

the origin of the products, the requesting customs authorities or competent governmental authorities

shall, except in exceptional circumstances, refuse preferential tariff treatment to the products

covered by the statement on origin. The period of 10 (ten) months may be extended by mutual

agreement between the Parties, taking into account the number of verification requests and the

complexity of the verifications.

8. The customs authorities or competent governmental authorities of the Party of import

requesting the verification shall, at the request of the customs authorities or competent

governmental authorities of the Party of export, notify those authorities of their decision on the

verification process.

ARTICLE 11.26

Consultations

1. If, in relation to the verification procedures set out in Article 11.25, the customs authorities or

competent governmental authorities of the Party of import intend to make a determination of origin

that is not consistent with the reply provided by the customs authorities or competent governmental

authorities of the Party of export in accordance with Article 11.25(6), the Party of import shall

notify this intention to the Party of export within 60 (sixty) days of receiving the reply in

accordance with Article 11.25(6).

& /en 150

2. At the request of either Party, the Parties shall hold consultations within 90 (ninety) days of

the date of the notification referred to in paragraph 1 or within an agreed period of time, with a view

to resolving differences in relation to the verification procedures. The period for consultation may

be extended on a case-by-case basis by mutual written agreement between the Parties.

3. If there are differences in relation to the verification procedures which cannot be settled

between the customs authorities or competent governmental authorities of the Party of import

requesting a verification and the customs authorities or competent governmental authorities of the

Party of export responsible for carrying out this verification, or if such differences raise questions as

to the interpretation of this Chapter, such differences or questions shall be submitted to the

Subcommittee on customs, trade facilitation and rules of origin, referred to in Article 11.32.

4. The customs authorities or competent governmental authorities of the Party of import

requesting a verification may make the determination on origin after consultations in the

Subcommittee on customs, trade facilitation and rules of origin and only on the basis of sufficient

justification, after having granted the importer the right to be heard. The determination shall be

notified to the Party of export.

5. Nothing in this Article shall affect the procedures or the rights of the Parties under

Chapter 29.

6. In all cases, disputes between the importer and the customs authorities or competent

governmental authorities of the Party of import shall be settled under the law of that Party.

& /en 151

ARTICLE 11.27

Confidentiality

1. Each Party shall maintain, in conformity with its law, the confidentiality of the information

collected pursuant to this Chapter and shall protect that information from disclosure.

2. Information obtained by the authorities of the importing Party may only be used by those

authorities for the purposes of this Chapter. Each Party shall ensure that the confidential

information collected pursuant to this Chapter is not used for purposes other than the administration

and enforcement of determination of origin and of customs matters, except with the permission of

the person or Party that provided such confidential information.

3. Notwithstanding paragraph 2, the importing Party may allow information collected pursuant

to this Chapter to be used or disclosed in any administrative, judicial or jurisdictional proceedings

instituted for failure to comply with customs related laws implementing this Chapter. In such a case

the importing Party shall notify the exporting Party of the use or disclosure of the information.

ARTICLE 11.28

Administrative measures and sanctions

A Party shall impose, in accordance with its laws and regulations, administrative measures and

sanctions on any person who draws up, or causes to be drawn up, a document which contains

incorrect information for the purposes of obtaining a preferential treatment for products.

& /en 152

SECTION C

FINAL PROVISIONS

ARTICLE 11.29

Ceuta and Melilla

1. For the purposes of this Chapter, in the case of the European Union, the term "Party" does not

include Ceuta and Melilla.

2. Products originating in MERCOSUR, when imported into Ceuta and Melilla, shall in all

respects be subject to the same customs treatment under this Agreement as that which is applied to

products originating in the customs territory of the European Union under Protocol 2 of the Act of

Accession of the Kingdom of Spain and the Portuguese Republic to the European Union.

MERCOSUR shall grant to imports of products covered by this Agreement and originating in Ceuta

and Melilla the same customs treatment as that which is granted to products imported from and

originating in the European Union.

3. The rules of origin and origin procedures referred to in this Chapter shall apply, mutatis

mutandis, to products exported from MERCOSUR to Ceuta and Melilla and to products exported

from Ceuta and Melilla to MERCOSUR.

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

& /en 153

5. The exporter shall indicate "MERCOSUR" or "Ceuta and Melilla" in field 2 of the text of the

statement on origin, depending on the origin of the product.

6. The customs authorities of the Kingdom of Spain shall be responsible for the application and

implementation of this Chapter in Ceuta and Melilla.

ARTICLE 11.30

Tariff rate quotas

Products exported under tariff rate quotas granted by the European Union shall be accompanied by

an official document issued by the Signatory MERCOSUR States, the model of which should be

communicated to the European Union by MERCOSUR no later than the date of entry into force of

this Agreement1.

ARTICLE 11.31

Goods in transit or storage

This Agreement may be applied to goods which comply with this Chapter and which, on the date of

entry into force of this Agreement, are either in transit or in temporary storage in bonded

warehouses or in free zones in the European Union or in MERCOSUR, subject to the submission to

the customs authorities of the importing Party, within 6 (six) months of said date, of a statement on

origin and, if appropriate, the documents showing that the goods comply with Article 11.14.

1 This provision applies without prejudice to the other provisions in this Chapter.

& /en 154

ARTICLE 11.32

Subcommittee on customs, trade facilitation and rules of origin

1. The Subcommittee on customs, trade facilitation and rules of origin established pursuant to

Article 9.9(4) shall have the following functions, in addition to those listed in Articles 2.4, 9.9,

12.6(10) and 12.21:

(a) conduct the preparatory internal work necessary for the Joint Committee in trade

configuration on:

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

(ii) any amendments to this Chapter proposed by a Party;

(b) adopt explanatory notes to facilitate the implementation of this Chapter; and

(c) conduct, where necessary, the consultations provided for in Article 11.26.

ARTICLE 11.33

Explanatory notes

The Subcommittee on customs, trade facilitation and rules of origin shall adopt, as appropriate,

explanatory notes regarding the interpretation, application and administration of this Chapter.

& /en 155

ARTICLE 11.34

Amendments to this Chapter

The Joint Council in trade configuration may amend this Chapter pursuant to point (f) of

Article 9.7(1).

CHAPTER 12

CUSTOMS AND TRADE FACILITATION

ARTICLE 12.1

Objectives and scope

1. The Parties recognise the importance of customs and trade-facilitation matters in the evolving

global trading environment.

2. The Parties recognise that international trade and customs instruments and standards are the

basis for import, export and transit requirements and procedures.

& /en 156

3. The Parties recognise that their legislation should be non-discriminatory and that customs and

other trade-related procedures should be based upon the use of modern methods and effective

controls to combat fraud, protect consumer health and safety and promote legitimate trade. Each

Party should periodically review its legislation and customs procedures. The Parties also recognise

that their customs and other trade-related procedures should not be more administratively

burdensome or trade-restrictive than necessary to achieve legitimate objectives and that they should

be applied in a predictable, consistent and transparent manner.

4. The Parties shall reinforce their cooperation with a view to ensuring that the relevant laws and

regulations, as well as the administrative capacity of the relevant administrations, fulfil the

objectives of promoting trade-facilitation while ensuring effective control of import, export and

transit of goods at the border.

5. The Parties shall cooperate with a view to support the development of regional integration

within both the European Union and MERCOSUR.

ARTICLE 12.2

Customs cooperation

1. The Parties, through their respective authorities, shall cooperate on customs and other trade-

related matters in order to ensure that the objectives set out in Article 12.1 are attained.

& /en 157

2. Cooperation may include:

(a) exchanging information concerning customs and other trade-related legislation, the

implementation of such legislation and customs procedures, particularly in the following

areas:

(i) simplification and modernisation of customs procedures;

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

(iii) free circulation of goods and regional integration;

(iv) facilitation of transit movements and transhipment;

(v) interagency coordination at the border;

(vi) relations with the business community;

(vii) supply chain security and risk management; and

(viii) use of information technology, data and documentation requirements and single window

systems, including work towards their future interoperability;

(b) exchanging information concerning international trade and customs instruments and

standards;

& /en 158

(c) collaborating on the customs-related aspects of securing and facilitating the international trade

supply chain in accordance with the Framework of Standards to Secure and Facilitate Global

Trade (hereinafter referred to as the "SAFE Framework" of the World Customs Organization

(hereinafter referred to as the "WCO");

(d) developing joint initiatives related to import and export procedures, including technical

assistance, capacity building and measures aimed at providing an effective service to the

business community;

(e) strengthening cooperation between the Parties in the fields of customs and trade-facilitation in

international organisations such as the WTO, the WCO and the United Nations Conference on

Trade and Development (hereinafter referred to as "UNCTAD");

(f) establishing, if relevant and appropriate, mutual recognition of trade partnership programmes

and customs controls, including equivalent trade-facilitation measures;

(g) fostering cooperation between customs and other government authorities or agencies in

relation to authorized economic operator programmes for example by aligning requirements,

facilitating access to benefits and minimising unnecessary duplication;

(h) working together with a view to reaching a common approach to issues relating to customs

valuation; and

(i) working together to further reduce release times and to release goods without undue delay, in

particular perishable goods.

& /en 159

3. The Parties shall provide each other with mutual administrative assistance in customs matters

in accordance with the provisions of Annex 12-A.

ARTICLE 12.3

Customs and other trade-related laws and regulations

1. Each Party's customs and trade-related laws and regulations1 shall be based upon:

(a) international instruments and standards applicable in the area of customs and trade, including:

the WTO Trade Facilitation Agreement done at Bali on 7 December 2013 (hereinafter

referred to as "WTO Trade Facilitation Agreement"); the International Convention on the

Harmonized Commodity Description and Coding System, done at Brussels on 14 June 1983;

the Safe Framework and the WCO data model, adopted in June 2005, and, to the extent

possible, the substantive elements of the Revised Kyoto Convention on the Simplification and

Harmonisation of Customs Procedures, done at Kyoto on the 18 May 1973;

(b) the common objective of facilitating legitimate trade through effective enforcement of and

compliance with legislative requirements; and

(c) legislation that is proportionate and non-discriminatory, avoids unnecessary burdens on

economic operators, provides for further facilitation for operators with high levels of

compliance, including favourable treatment with respect to customs controls prior to the

release of goods, and ensures safeguards against fraud and illicit or damaging activities.

1 For greater certainty, reference to laws and regulations covers procedures enshrined therein.

& /en 160

2. In order to improve working methods, as well as to ensure non-discrimination, transparency,

efficiency, integrity and accountability of operations, each Party shall:

(a) simplify and review requirements and formalities wherever possible with a view to the rapid

release and clearance of goods;

(b) work towards the further simplification and standardisation of data and documentation

required by customs authorities and other agencies; and

(c) ensure that the highest standards of integrity be maintained, through the application of

measures reflecting the principles of the relevant international conventions and instruments in

this field.

ARTICLE 12.4

Release of goods

1. Each Party shall adopt or maintain requirements and procedures that:

(a) provide for the prompt release of goods within a period no greater than that required to ensure

compliance with its customs and other trade-related laws and formalities;

& /en 161

(b) provide for advance electronic submission and processing of documentation and any other

required information prior to the arrival of the goods, to enable the release of goods on

arrival1; and

(c) allow for the release of goods prior to the final determination of customs duties, taxes, fees

and charges, if such a determination is not done prior to, upon, or as rapidly as possible after

arrival, and if all other regulatory requirements have been met.

2. For the purposes of point (c) of paragraph 1, as a condition for such release, each Party may

require a guarantee for any amount not yet determined in the form of a surety, a deposit or another

appropriate instrument provided for in its laws and regulations. Such guarantee shall not be greater

than the amount the Party requires to ensure payment of customs duties, taxes, fees and charges

ultimately due for the goods covered by the guarantee. The guarantee shall be discharged when it is

no longer required2.

3. Each Party shall strive to further reduce release-times and release the goods without undue

delay.

1 Signatory MERCOSUR States shall comply with the commitments in this paragraph in

accordance with Article 16 (Notification of definitive dates for implementation of Category B

and Category C) of the WTO Trade Facilitation Agreement. 2 Signatory MERCOSUR States shall comply with the commitments in this paragraph in

accordance with Article 16 (Notification of definitive dates for implementation of Category B

and Category C) of the WTO Trade Facilitation Agreement.

& /en 162

ARTICLE 12.5

Perishable goods

1. For the purposes of this provision, perishable goods are goods that rapidly decay due to their

natural characteristics, in particular in the absence of appropriate storage conditions.

2. Each Party shall give appropriate priority to perishable goods when scheduling and

performing any examinations that may be required.

3. On request of an economic operator, each Party shall, if practicable and consistent with its

laws and regulations:

(a) provide for the clearance of a consignment of perishable goods outside the business hours of

customs and other relevant authorities; and

(b) allow consignments of perishable goods to be cleared at the premises of the economic

operator.

& /en 163

ARTICLE 12.6

Advance rulings

1. For the purposes of this Article, "advance ruling" means a written decision provided to an

applicant prior to the importation of a good covered by the application that sets forth the treatment

that the Party shall provide to the good at the time of importation with regard to:

(a) the good's tariff classification; and

(b) the origin of the good.

2. Each Party shall issue, through its customs authorities, an advance ruling that sets forth the

treatment to be provided to the goods concerned. If an applicant submits a written request, including

in electronic format, containing all necessary information in accordance with the laws and

regulations of the issuing Party, that ruling shall be issued in a reasonable, time-bound manner.

3. The advance ruling shall be valid for a period of at least 3 (three) years after its issuance

unless the law, facts or circumstances supporting the original advance ruling change.

4. A Party may decline to issue an advance ruling if the question raised is the subject of

administrative or judicial review or if the application does not relate to any intended use of the

advance ruling. If a Party declines to issue an advance ruling, it shall promptly notify the applicant

in writing, setting out the relevant facts and the basis for its decision.

& /en 164

5. Each Party shall publish, at least:

(a) the requirements for the application for an advance ruling, including the information to be

provided and the format;

(b) the time period by which it will issue an advance ruling; and

(c) the length of time for which the advance ruling is valid.

6. If a Party revokes, modifies or invalidates an advance ruling, it shall provide written notice to

the applicant setting out the relevant facts and the basis for its decision. A Party may revoke,

modify or invalidate an advance ruling with retroactive effect, only if the ruling was based on

incomplete, incorrect, false or misleading information.

7. An advance ruling issued by a Party shall be binding on that Party in respect of the applicant

that sought it. The Party may provide that the advance ruling be binding on the applicant.

8. Each Party shall provide, upon written request of an applicant, a review of the advance ruling

or of the decision to revoke, modify or invalidate it1.

9. Subject to any confidentiality requirements, substantive elements of these rulings shall be

published, online or in other appropriate formats.

1 Under this paragraph, a review may, either before or after the ruling has been acted upon, be

provided by the official, office, or authority that issued the ruling, a higher or independent

administrative authority, or a judicial authority.

& /en 165

10. To facilitate trade, the Subcommittee on customs, trade facilitation and rules of origin,

referred to in Article 12.21, shall regularly discuss updates on changes in the respective laws and

regulations of the Parties on the matters listed in this Article.

11. The Parties may agree upon advance rulings on any other matter.

ARTICLE 12.7

Transit and transhipment

1. Each Party shall ensure freedom of transit through its territory via the route most convenient

for transit.

2. Without prejudice to legitimate control, each Party shall accord to traffic in transit to or from

the territory of the other Party, treatment no less favourable than that accorded to its own like goods

and their movement, including imports and exports, when such goods are transported on the same

route under like conditions.

3. Each Party shall, to the extent possible, apply to transhipped goods customs procedures that

are less burdensome than those applied to traffic in transit.

4. Each Party shall operate bonded transport regimes that allow the transit of goods without

payment of customs duties or other charges subject to the provision of an appropriate guarantee.

5. Each Party shall promote and implement regional transit arrangements with a view to

facilitating traffic in transit and reducing trade barriers.

& /en 166

6. Each Party shall draw upon and use international standards and instruments relevant to transit.

7. Customs transit procedures may be used also if the transit of goods begins or ends in the

territory of a Party (inland transit).

8. The Parties shall ensure that all concerned authorities and agencies in their respective

territories cooperate and coordinate on customs matters with a view to facilitating traffic in transit.

ARTICLE 12.8

Authorized economic operator

1. Each Party shall establish or maintain a trade-facilitation partnership programme for operators

who meet specified criteria, hereinafter referred to as authorized economic operators (hereinafter

referred to as "AEO").

2. The specified criteria that operators need to meet in order to qualify as authorized economic

operators, hereinafter referred to as "the specified criteria", shall be related to compliance, or the

risk of non-compliance, with requirements specified in each Party's laws and regulations. The

specified criteria, which shall be published, may include:

(a) the absence of any serious infringement or repeated infringements of customs and taxation

laws and regulations, including no record of serious criminal offences relating to the

economic activity of the applicant;

& /en 167

(b) the demonstration by the applicant of a high level of control of his or her operations and of the

flow of goods, by means of a system of managing commercial and, where appropriate,

transport records which allows appropriate customs controls;

(c) financial solvency, which shall be deemed to be proven if the applicant has good financial

standing, which enables him or her to fulfil his or her commitments, with due regard to the

characteristics of the type of business activity concerned;

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

and

(e) appropriate security and safety standards.

3. The specified criteria shall not be designed or applied so as to afford or create arbitrary or

unjustifiable discrimination between operators where the same conditions prevail and shall allow

the participation of SMEs.

4. The trade-facilitation partnership programme shall include at least four of the following

benefits:

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

(b) low rate of physical inspections and examinations, as appropriate;

(c) rapid release time, as appropriate;

(d) deferred payment of duties, taxes, fees and charges;

& /en 168

(e) use of comprehensive guarantees or reduced guarantees;

(f) a single customs declaration for all imports or exports in a given period; and

(g) clearance of goods at the premises of the authorized economic operator or another place

authorised by the customs authorities.

5. The Parties should ensure coordination between customs authorities and other border agencies

in the development of their respective authorized economic operator programmes through means

such as the alignment of requirements, the minimisation of unnecessary duplication and the access

to benefits related to controls and requirements administered by agencies other than customs

authorities.

ARTICLE 12.9

Single window

Each Party shall endeavour to establish single window systems, enabling traders to submit through

a single entry point documentation and data requirements for importation, exportation or transit of

goods to the participating authorities or agencies.

& /en 169

ARTICLE 12.10

Transparency

1. The Parties recognise the importance of timely consultations with trade representatives on a

Party's proposed laws and procedures related to customs and trade facilitation matters.

2. Each Party shall ensure that its respective customs and other trade-related requirements and

procedures continue to meet the needs of the trading community, follow best practices and remain

as less trade-restrictive as possible.

3. Each Party shall, as appropriate, provide for regular consultations between its border agencies

and traders or other stakeholders located within its territory.

4. Each Party shall promptly publish, in a non-discriminatory and easily accessible manner, and

as far as possible through electronic means, new laws, regulations and general procedures related to

customs and trade-facilitation matters prior to the application of any such laws, regulations or

general procedures, as well as changes to and interpretations of such laws, regulations and general

procedures. This shall include:

(a) importation, exportation and transit procedures, including port, airport, and other entry-point

procedures and hours of operation, and required forms and documents;

(b) applied rates of duties and taxes of any kind imposed on or in connection with importation or

exportation;

(c) fees and charges imposed by or for governmental agencies on or in connection with

importation, exportation or transit;

& /en 170

(d) rules for the classification or valuation of products for customs purposes;

(e) laws, regulations and administrative rulings of general application relating to rules of origin;

(f) import, export or transit restrictions or prohibitions;

(g) penalty provisions against breaches of import, export or transit formalities;

(h) appeal procedures;

(i) agreements or parts thereof with any country or countries relating to importation, exportation

or transit;

(j) procedures relating to the administration of tariff quotas;

(k) points of contact for information enquiries; and

(l) other relevant notices of an administrative nature in relation to the above.

5. Each Party shall ensure there is a reasonable time period between the publication of new or

amended laws, regulations and general procedures and fees or charges and their entry into force.

6. Each Party shall make available online and update, as appropriate, the following:

(a) a description of its importation, exportation and transit procedures, including appeal

procedures, informing of the practical steps needed to import and export and for transit;

& /en 171

(b) the forms and documents required for importation into, exportation from, or transit through

the territory of that Party; and

(c) contact information on enquiry points.

7. Each Party shall establish or maintain one or more enquiry points to answer within a

reasonable time enquiries from governments, traders and other interested parties on customs and

other trade-related matters. The Parties shall not require the payment of a fee for answering

enquiries or providing required forms and documents. The enquiry points shall answer enquiries

and provide the forms and documents within a reasonable time period set by each Party, which may

vary depending on the nature or complexity of the enquiry.

ARTICLE 12.11

Customs valuation

The Agreement on the Implementation of Article VII of GATT (1994) shall govern customs

valuation rules applied to reciprocal trade between the Parties. Its provisions are hereby

incorporated into and made an integral part of this Agreement.

ARTICLE 12.12

Risk management

1. Each Party shall adopt or maintain a risk management system for customs control.

& /en 172

2. Each Party shall design and apply risk management in such a manner as to avoid arbitrary or

unjustifiable discrimination, or disguised restrictions on international trade.

3. Each Party shall concentrate customs control and other relevant border controls on high-risk

consignments and expedite the release of low-risk consignments. Each Party may also select, on a

random basis, consignments for such controls as part of its risk management.

4. Each Party shall base risk management on assessment of risk through appropriate selectivity

criteria.

5. The provisions of this Article are, whenever possible, applicable to procedures administered

by other border agencies.

ARTICLE 12.13

Post-clearance audit

1. With a view to expediting the release of goods, each Party shall adopt or maintain post-

clearance audit to ensure compliance with customs and other related laws and regulations.

2. Each Party shall conduct post-clearance audits in a risk-based manner.

3. Each Party shall conduct post-clearance audits in a transparent manner. If an audit is

performed and conclusive results have been achieved, the Party shall, without delay, notify the

person whose record is audited of the results, the person's rights and obligations and the reasons for

the results.

& /en 173

4. The Parties acknowledge that the information obtained in a post-clearance audit may be used

in further administrative or judicial proceedings.

5. The Parties shall, wherever practicable, use the results of a post-clearance audit in applying

risk management.

ARTICLE 12.14

Customs brokers

Each Party shall publish its measures on the use of customs brokers. Each Party shall apply

transparent, non-discriminatory and proportionate rules if and when licensing customs brokers.

A Party shall not adopt new measures introducing the mandatory use of customs brokers.

ARTICLE 12.15

Pre-shipment Inspections

A Party shall not require the mandatory use of pre-shipment inspections as defined in the WTO

Agreement on Pre-shipment Inspection or any other inspection activity performed at destination,

before customs clearance, by private companies.

& /en 174

ARTICLE 12.16

Appeals

1. Each Party shall provide effective, prompt, non-discriminatory and easily accessible

procedures to guarantee the right of appeal against the administrative actions, rulings and decisions

of customs or other competent authorities affecting import or export of goods or goods in transit.

2. Appeal procedures may include administrative review by the supervising authority and

judicial review of decisions taken at the administrative level according to each Party's laws and

regulations.

3. Any person who has applied to the customs authorities for a decision and has not obtained a

decision on that application within the applicable time-limits shall also be entitled to exercise the

right of appeal.

4. Each Party shall provide a person to whom it issues an administrative decision with the

reasons for that decision, so as to enable that person to have recourse to appeal procedures if

necessary.

& /en 175

ARTICLE 12.17

Import, export and transit formalities and data and documentation requirements

1. Each Party shall ensure that import, export and transit formalities and data and documentation

requirements are:

(a) adopted or applied with a view to a rapid release of goods, in particular perishable goods,

provided the conditions for the release are fulfilled;

(b) adopted or applied in a manner that aims to reduce the time and cost of compliance for traders

and operators;

(c) the least trade-restrictive measure chosen, if two or more alternative measures are reasonably

available for fulfilling the policy objective or objectives in question; and

(d) not maintained, including parts thereof, if they, or parts of them are no longer required.

2. MERCOSUR shall work towards applying common customs procedures and uniform customs

data requirements for the release of goods.

ARTICLE 12.18

Use of information technology

1. Each Party shall use information technologies that expedite procedures for the release of

goods in order to facilitate trade between the Parties.

& /en 176

2. Each Party shall:

(a) make available by electronic means customs declarations and, whenever possible, other

documents required for the import, transit or export of goods;

(b) allow a customs declaration and, whenever possible, any other data requirements for the

import and export of goods to be submitted in electronic format;

(c) establish means of providing for the electronic exchange of customs information with its

trading community;

(d) promote the electronic exchange of data between its respective traders, customs

administrations and other trade-related agencies; and

(e) use electronic risk management systems for assessment and targeting that enable its customs

authorities and, whenever possible, other border agencies to focus their inspections on high-

risk goods and that facilitate the release and movement of low-risk goods.

3. Each Party shall adopt or maintain procedures allowing the option of electronic payment for

duties, taxes, fees and charges incurred upon importation and exportation collected by customs

authorities and, whenever possible and applicable, by other border agencies.

& /en 177

ARTICLE 12.19

Penalties

1. Each Party shall ensure that its customs laws and regulations provide that any penalties

imposed for breaches of customs regulations or procedural requirements be proportionate and non-

discriminatory.

2. Penalties for a breach of a Party's customs law, regulation or procedural requirement are

imposed only on the person responsible under that Party's law for such breach.

3. Penalties imposed shall depend on the facts and circumstances of the case and shall be

commensurate with the degree and severity of the breach. Each Party shall avoid incentives for the

assessment or collection of a penalty or conflicts of interest in the assessment and collection of

penalties.

4. In the event of voluntary prior disclosure to a customs administration of the circumstances of

a breach of a customs law, regulation or procedural requirement, each Party is encouraged to

consider this as a potential mitigating factor when establishing a penalty.

5. When a penalty is imposed for a breach of a customs law, regulation or procedural

requirement, an explanation in writing is provided to the person upon whom the penalty is imposed

specifying the nature of the breach and the applicable law, regulation or procedure under which the

amount or range of penalty for the breach has been prescribed.

& /en 178

ARTICLE 12.20

Temporary admission

1. For the purposes of this Article, the term "temporary admission" means the customs

procedure under which certain goods, including their means of transport, that are brought into a

customs territory for a specific purpose are conditionally relieved from payment of import duties

and taxes, without application of import prohibitions or restrictions of economic character. Such

goods must be intended for re-exportation within a specified period and without having undergone

any change except normal depreciation due to the use made of them.

2. Nothing in this Article should be construed as to relieve imported goods from meeting trade-

related requirements of non-economic character, in particular sanitary and phytosanitary measures.

3. Each Party shall, in accordance with its law, grant temporary admission, with total conditional

relief from import duties and taxes and without application of import restrictions or prohibitions of

economic character to the following goods:

(a) goods for display or use at exhibitions, fairs, meetings or similar events;

(b) professional equipment for the press or for sound or television broadcasting; cinematographic

equipment; any other equipment necessary for the exercise of the calling, trade or profession

of a person visiting the territory of another country to perform a specified task;

(c) goods imported in connection with a commercial operation but whose importation does not in

itself constitute a commercial operation;

& /en 179

(d) goods imported in connection with a manufacturing operation (such as plates, drawings,

moulds, plans and models, for use during a manufacturing process); replacement means of

production;

(e) goods imported exclusively for educational, scientific or cultural purposes;

(f) personal effects of passengers and goods imported for sports purposes;

(g) tourist publicity material;

(h) goods imported for humanitarian purposes; and

(i) animals imported for specific purposes.

3. Each Party shall, for the temporary admission of the goods referred to in paragraph 2 and

regardless of their origin, accept A.T.A. carnets issued and endorsed by the other Party in

accordance with the Customs Convention on the A.T.A. Carnet for the temporary admission of

goods done at Brussels on 6 December 1961, and guaranteed by an association forming part of the

international guarantee chain, certified by the competent authorities and valid in the territory of the

importing Party1.

1 This provision shall apply only in respect of the European Union and of those Signatory

MERCOSUR States that are Contracting parties to the Convention on Temporary Admission

done at Istanbul on 26 June 1990 and according to the commitments undertaken in that

Convention.

& /en 180

ARTICLE 12.21

Subcommittee on customs, trade facilitation and rules of origin

The Subcommittee on customs, trade facilitation and rules of origin, established pursuant to

Article 9.9(4) shall, in addition to the functions listed in Articles 2.4, 9.9, 11.32 and 12.6(10), have

the function to enhance cooperation on the development, application and enforcement of customs

and trade-related procedures, mutual administrative assistance in customs matters, rules of origin

and administrative cooperation.

ARTICLE 12.22

Joint Council in trade configuration

With a view to implementing the relevant provisions in this Chapter, the Joint Council in trade

configuration shall have the power to adopt decisions relating to AEO programmes and their mutual

recognition as well as to joint initiatives relating to customs procedures and trade-facilitation.

& /en 181

CHAPTER 13

TECHNICAL BARRIERS TO TRADE

ARTICLE 13.1

Objective

The objective of this Chapter is to facilitate trade in goods between the Parties by identifying,

preventing and eliminating unnecessary technical barriers to trade (hereinafter referred to as "TBT")

and to enhance cooperation between the Parties in matters covered by this Chapter.

ARTICLE 13.2

Relation to the TBT Agreement

1. The Parties reaffirm their rights and obligations under the TBT Agreement, which is hereby

incorporated into and made part of this Agreement.

2. References to "this Agreement" in the TBT Agreement are to be read, as appropriate, as

references to the Partnership Agreement between the European Union and its Member States, of the

one part, and the Common Market of the South, the Argentine Republic, the Federative Republic of

Brazil, the Republic of Paraguay and the Oriental Republic of Uruguay, of the other part.

3. The term "Members" in the TBT Agreement means the Parties to this Agreement.

& /en 182

ARTICLE 13.3

Scope

1. This Chapter applies to the preparation, adoption and application of standards, technical

regulations and conformity assessment procedures that may affect trade in goods between

the Parties.

2. This Chapter does not apply to:

(a) purchasing specifications prepared by governmental bodies for production or consumption

requirements of governmental bodies; and

(b) sanitary and phytosanitary measures as defined in Annex A to the SPS Agreement.

ARTICLE 13.4

Definitions

For the purposes of this Chapter, the following definitions apply:

(a) the definitions set out in Annex 1 to the TBT Agreement;

(b) "supplier's declaration of conformity" means a first-party attestation issued by the

manufacturer on his sole responsibility based on the results of an appropriate type of

conformity assessment activity and excluding mandatory third-party assessment;

& /en 183

(c) "ISO" means the International Organization for Standardization;

(d) "IEC" means the International Electrotechnical Commission;

(e) "ITU" means the International Telecommunication Union;

(f) "Codex Alimentarius" means the Codex Alimentarius Commission (hereinafter referred to as

"Codex Alimentarius");

(g) "ILAC" means the International Laboratory Accreditation Cooperation;

(h) "IAF" means the International Accreditation Forum; and

(i) "IECEE CB Scheme" means the Scheme of the IEC System of Conformity Assessment

Schemes for Electrotechnical Equipment and Components for Mutual Recognition of Test

Certificates for Electrical Equipment.

ARTICLE 13.5

Joint cooperation on trade-facilitating initiatives

1. The Parties recognise the importance of intensifying their cooperation with a view to

increasing mutual understanding of their respective systems and helping to eliminate or avoid the

creation of TBT. In this regard, the Parties shall work towards the identification, promotion,

development and implementation, as appropriate, of trade-facilitating initiatives, on a case-by-case

basis.

& /en 184

2. A Party may propose to the other Party sector-specific initiatives in matters covered by this

Chapter. Those proposals shall be transmitted to the TBT Chapter coordinator, nominated pursuant

to Article 13.13, and may include:

(a) information exchange on regulatory approaches and practices;

(b) joint analysis of a sector or group of products;

(c) initiatives to further align technical regulations and conformity assessment procedures with

relevant international standards;

(d) the promotion of the use of accreditation to assess the competence of conformity assessment

bodies; and

(e) the consideration of mutual or unilateral recognition of conformity assessment results.

3. Whenever one of the Parties proposes a specific trade-facilitating initiative, the other Party

shall duly consider such proposal and reply within a reasonable period of time. If the other Party

rejects the proposed initiative, it shall explain the reasons for its decision to the proposing Party.

4. The terms of the work envisaged in this Article shall be defined by, of the one hand, the

European Union and, of the other hand, MERCOSUR or the Signatory MERCOSUR States

engaged in each trade-facilitating activity, if needed, and may include establishing ad hoc working

groups. In order to benefit from non-governmental perspectives on matters related to this Article,

each Party may, as appropriate and in accordance with its rules and procedures, consult with

stakeholders and other interested parties.

& /en 185

5. The Subcommittee on trade in goods, established pursuant to Article 9.9(4), shall discuss the

results of the work carried out pursuant to this Article and may consider appropriate actions.

6. Nothing in this Article shall be construed as obliging a Party to:

(a) deviate from domestic procedures for preparing and adopting regulatory measures;

(b) take actions that would undermine or impede the timely adoption of regulatory measures to

achieve its public policy objectives; or

(c) adopt any particular regulatory outcome.

7. If initiatives referred to in this Article are agreed and if that is necessary for their

implementation, each Party shall facilitate the interaction of technical teams to demonstrate their

conformity assessment schemes and systems in order to increase mutual understanding.

8. For the purposes of this Article, the European Union shall act through the European

Commission.

ARTICLE 13.6

Technical regulations

1. Each Party shall make best use of good regulatory practices with regard to the preparation,

adoption and application of technical regulations, as provided for in the TBT Agreement, including,

for example, preference for performance-based technical regulations, use of impact assessments or

stakeholder consultation.

& /en 186

2. In particular, the Parties shall:

(a) use relevant international standards as a basis for their technical regulations, including any

conformity assessment elements therein, except if such international standards would be an

ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued; if

international standards are not used as a basis for a technical regulation which may have a

significant effect on trade, a Party shall, upon request of the other Party, explain the reasons

why such standards are considered inappropriate or ineffective for the fulfilment of the

legitimate objective pursued;

(b) when reviewing their respective technical regulations, in addition to Article 2.3 of the TBT

Agreement and without prejudice to Articles 2.4 and 12.4 of the TBT Agreement, increase the

alignment of those regulations with relevant international standards; a Party shall consider

among others any new development in the relevant international standards and whether the

circumstances that have given rise to any divergence from any relevant international standards

continue to exist;

(c) promote the development of regional technical regulations and encourage that these are

adopted at national level and replace existing ones, in order to facilitate trade between

the Parties;

(d) allow a reasonable interval between the publication of technical regulations and their entry

into force for economic operators of the other Party to adapt1;

1 "Reasonable interval" shall be understood to mean normally a period of not less

than 6 (six) months, except when this would be ineffective in fulfilling the legitimate

objectives pursued.

& /en 187

(e) carry out the impact analysis of planned technical regulations in accordance with their

respective rules and procedures; and

(f) when preparing technical regulations, take due account of the characteristics and special needs

of SMEs.

ARTICLE 13.7

Standards

1. The Parties reaffirm their obligations under Article 4.1 of the TBT Agreement, particularly in

respect of taking all reasonable measures to ensure that all standardising bodies within their

territories 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. International standards developed by ISO, IEC, ITU or the Codex Alimentarius shall be

considered as the relevant international standards within the meaning of Articles 2 and 5 and

Annex 3 to the TBT Agreement.

& /en 188

3. A standard developed by other international organisations may also be considered a relevant

international standard within the meaning of Articles 2 and 5 and Annex 3 to the TBT Agreement,

if:

(a) it has been developed by a standardising body which seeks to establish consensus either:

(i) among national delegations of the participating WTO Members representing all the

national standardising bodies in their territory that have adopted, or expect to adopt,

standards for the subject matter to which the international standardisation activity

relates; or

(ii) among governmental bodies of participating WTO Members; and

(b) it has been developed in accordance with the WTO TBT Committee Decision on Principles

for the Development of International Standards, Guides and Recommendations with relation

to Articles 2 and 5 and Annex 3 to the TBT Agreement.

4. With a view to harmonising standards on a basis as wide as possible each Party shall

encourage, within the limits of its competence and resources, the standardising bodies within its

territory, as well as the regional standardising bodies of which that Party or the standardising bodies

within its territory are members, to:

(a) participate, within the limits of their resources, in the preparation of international standards by

relevant international standardising bodies;

(b) cooperate with the relevant national and regional standardising bodies of the other Party in

international standardisation activities;

& /en 189

(c) use relevant international standards as a basis for the standards they develop, except where

such international standards would be ineffective or inappropriate, for instance because of an

insufficient level of protection or fundamental climatic or geographical factors or fundamental

technological problems;

(d) avoid duplication of, or overlap with, the work of international standardising bodies;

(e) promote the development of standards at regional level and the adoption of such standards by

national standardising bodies, thereby replacing existing national standards;

(f) review national and regional standards not based on relevant international standards at regular

intervals, with a view to increasing their alignment with relevant international standards; and

(g) foster bilateral cooperation with the standardising bodies of the other Party.

5. The Parties should exchange information through the TBT Chapter coordinators, nominated

pursuant to Article 13.13, on:

(a) their use of standards as a basis for, or in support of, technical regulations;

(b) cooperation agreements implemented by either Party on standardisation, for example on

standardisation issues in free trade agreements with third countries; and

(c) their respective standardisation processes, and the use of international, regional or sub-

regional standards as a basis for their national standards.

& /en 190

ARTICLE 13.8

Conformity assessment procedures and accreditation

1. The provisions set out in Article 13.6 with respect to the preparation, adoption and application

of technical regulations also apply to conformity assessment procedures.

2. If a Party requires conformity assessment as a positive assurance that a product conforms with

a technical regulation, it shall:

(a) select conformity assessment procedures proportionate to the risks involved;

(b) consider, in the regulatory process, the use of the supplier's declaration of conformity as

assurance of conformity, among other options, for showing compliance with technical

regulations; and

(c) if requested, provide information to the other Party on the reasons for selecting a particular

conformity assessment procedure for specific products.

3. If a Party requires third-party conformity assessment as a positive assurance that a product

conforms with a technical regulation, and it has not reserved this task to a governmental body as

specified in paragraph 4, it shall:

(a) preferentially use accreditation to qualify conformity assessment bodies;

& /en 191

(b) make best use of international standards for accreditation and conformity assessment, as well

as international agreements involving the Parties' accreditation bodies, for example, through

the mechanisms of ILAC and IAF;

(c) consider to join or, as applicable, encourage its testing, inspection and certification bodies to

join any functioning international agreements or arrangements for harmonisation or

facilitation of acceptance of conformity assessment results;

(d) within its territory, promote competition between conformity assessment bodies designated by

the authorities for a particular product or set of products with a view to enabling economic

operators to choose amongst them;

(e) ensure that conformity assessment bodies are independent of manufacturers, importers and

distributors, in the sense that they carry out their activities with objectivity and independence

of judgment;

(f) ensure that there are no conflicts of interest between accreditation bodies and conformity

assessment bodies, or between activities of market surveillance authorities and activities of

conformity assessment bodies;

(g) allow, to the extent possible, conformity assessment bodies to use subcontractors to perform

testing or inspections in relation to the conformity assessment, including subcontractors

located in the territory of the other Party; and

(h) publish online a list of the bodies that it has designated to perform such conformity

assessment and relevant information on the scope of each such body's designation.

& /en 192

4. Nothing in point (g) of paragraph 3 shall be construed as prohibiting a Party from requiring

subcontractors to meet the requirements that the conformity assessment body to which it is

contracted would be required to meet in order to perform the contracted tests or inspection itself.

5. Nothing in this Article shall preclude a Party from requesting that conformity assessment in

relation to specific products is performed by specified government authorities of that Party. In such

cases, that Party shall:

(a) establish the conformity assessment fees in accordance with the approximate cost of the

services rendered and, upon request of an applicant for conformity assessment, provide the

different elements included in those fees; and

(b) in principle, make the conformity assessment fees publicly available or, publicly available or,

when such information is not publicly available, provide it upon request.

& /en 193

6. Notwithstanding paragraphs 3 to 5 of this Article, in the fields which are listed in

Annex 13-A, in which the European Union accepts supplier's declaration of conformity as

assurance that a product conforms to a technical regulation, and in which a Signatory MERCOSUR

State requires mandatory third-party testing or certification for these fields, the Signatory

MERCOSUR State shall, as an assurance that a product conforms with the requirements of a

Signatory MERCOSUR State's technical regulations, accept certificates or, in cases where such

acceptance is not provided for under its relevant laws and regulations, accept test reports issued by

conformity assessment bodies that are located in the territory of the European Union and which

have been accredited for the relevant scopes by an accreditation body member of the international

arrangements for mutual recognition of the ILAC and the IAF; or accept certificates that have been

issued under the IECEE CB Scheme. In order to accept such certificates or test reports, a Signatory

MERCOSUR State may require in its relevant laws and regulations that bilateral arrangements,

including memoranda of understanding, exist between the conformity assessment body located in

the territory of the European Union and the conformity assessment body located in the territory of

the Signatory MERCOSUR State.

7. If supplier's declarations of conformity are considered a valid conformity assessment

procedure in the European Union, test reports issued by conformity assessment bodies that are

located in the territory of the Signatory MERCOSUR State, shall be accepted as a valid document

in the process of demonstrating that a product conforms with the European Union's technical

regulation requirements. The manufacturer shall remain responsible in all cases for the conformity

of the product.

& /en 194

8. Paragraph 6 also applies where a Signatory MERCOSUR State introduces new mandatory

third-party testing or certification requirements for the fields specified in Annex 13-A, in

accordance with paragraph 10 of this Article. If the European Union introduces mandatory third-

party testing or certification requirements for the fields specified in Annex 13-A, in accordance with

paragraph 10 of this Article, the Parties shall discuss in the Subcommittee on trade in goods,

referred to in Article 13.14, whether any steps need to be taken to ensure reciprocity as regards the

acceptance of tests reports or certificates issued by conformity assessment bodies that are located in

the territory of the Signatory MERCOSUR State.

9. The Joint Council in trade configuration may adopt a decision to amend Section A of

Annex 13-A.

10. Notwithstanding paragraph 6 of this Article, either Party may introduce requirements for

mandatory third-party testing or certification for the fields specified in Annex 13-A, for products

falling within the scope of that Annex under the following conditions:

(a) the introduction of such requirements or procedures are justified under the legitimate

objectives referred to in Article 2.2 of the TBT Agreement;

(b) the reasons for the introduction of any such requirements or procedures are supported by

substantiated technical or scientific information regarding the performance of the products in

question;

(c) any such requirements or procedures are not more trade-restrictive than necessary to fulfil the

Party's legitimate objective, taking account of the risks that non-fulfilment would create; and

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(d) the Party could not have reasonably foreseen the need for introducing any such requirements

or procedures at the date of entry into force of this Agreement.

11. Paragraph 6 is without prejudice to the exercise, on a non-discriminatory basis, of market

surveillance competences by the authorities of a Party, including additional testing on samples at

the point of entry.

ARTICLE 13.9

Transparency

1. With regard to the preparation, adoption and application of standards, technical regulations

and conformity assessment procedures, each Party shall:

(a) take the other Party's views into account if the process of developing a technical regulation is

open to public consultation, wholly or partially;

(b) when developing major technical regulations and conformity assessment procedures which

may have a significant effect on trade ensure in accordance with its respective laws and

regulations that transparency procedures are in place that allow persons of the Parties to

provide input through a formal public consultation process, except when urgent problems of

safety, health, environmental protection or national security arise or threaten to arise;

(c) allow persons of the other Party to participate in the consultation process referred to in point

(b) on terms no less favourable than those accorded to its own persons and, whenever

possible, make the results of that consultation process public;

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(d) allow, in principle, a period of at least 60 (sixty) days for the other Party to provide written

comments on the proposed technical regulations and conformity assessment procedures, and

consider a reasonable request to extend the comment period;

(e) provide, in cases where the notified text is not in one of the official WTO languages, a clear

and comprehensive description of the content of the measure in the WTO notification format;

(f) if it receives written comments on its proposed technical regulation or conformity assessment

procedure from the other Party:

(i) discuss, upon request by the other Party, the written comments, whenever possible with

the participation of its competent regulatory authority and at a time when they can be

taken into account; and

(ii) reply in writing to the comments, whenever possible no later than the date of

publication of the technical regulation or conformity assessment procedure;

(g) provide, if requested by the other Party, information regarding the objectives of, legal basis

and rationale for, a technical regulation or conformity assessment procedure that the Party has

adopted or is proposing to adopt;

(h) provide information on the adoption and the entry into force of the technical regulation or

conformity assessment procedure and the adopted final text through an addendum to the

original notification to the WTO;

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(i) consider a reasonable request from the other Party, received prior to the end of the comment

time period following the transmission of a proposed technical regulation, to extend the time

period between the adoption of the technical regulation and its entry into force, except when

the delay would be ineffective in fulfilling the legitimate objectives pursued; and

(j) provide free of charge access to the electronic version of the notified text with the

notification.

2. For the purposes of point (d) of paragraph 1, where urgent problems of safety, health,

environmental protection or national security arise or threaten to arise, Articles 2.10 and 5.7 of the

TBT Agreement shall apply.

3. If standards are made mandatory through incorporation or referencing in a draft technical

regulation or conformity assessment procedure, the transparency obligations related to TBT

notification set out in this Article and in Article 2 or 5 of the TBT Agreement shall be fulfilled.

4. Each Party shall ensure that all technical regulations and mandatory conformity assessment

procedures adopted and in force are publicly available on an official website free of charge. Each

Party shall always provide unrestricted access to all information relevant to the achievement of

conformity with a technical regulation. If standards provide a presumption of conformity with

technical regulations and these standards are not referred to in those technical regulations, each

Party shall ensure access to the information on corresponding standards.

5. Each Party shall, upon a reasonable request of the other Party or its economic operators,

provide information on technical regulations in force and, as appropriate and available, written

guidance on compliance with the technical regulations, without undue delay.

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ARTICLE 13.10

Marking and labelling

1. The Parties' technical regulations including or dealing exclusively with mandatory marking or

labelling shall observe the principles of Article 2 of the TBT Agreement.

2. In particular, if a Party requires mandatory marking or labelling of products:

(a) it shall only require information which is relevant for consumers or users of the product or

authorities to indicate the product's conformity with the mandatory technical requirements;

(b) and if a Party requires any prior approval, registration or certification of the labels or

markings of the products, as a precondition for placing on the market products that otherwise

comply with its mandatory technical requirements, it shall ensure that the requests submitted

by the economic operators of the other Party are decided without undue delay and on a non-

discriminatory basis;

(c) and if a Party requires the use of a unique identification number, the Party shall issue such

number to the economic operators of the other Party without undue delay and on a non-

discriminatory basis;

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(d) and provided that it is not misleading, contradictory or confusing in relation to the importing

Party's regulatory requirements and the legitimate objectives under the TBT Agreement are

not compromised thereby, the Party shall permit:

(i) information in other languages in addition to the language required in the importing

Party of the products; and

(ii) nomenclatures, pictograms, symbols or graphics adopted in international standards;

(e) it shall accept, whenever possible, that supplementary labelling and corrections to labelling

take place in customs warehouses or other designated areas at the point of import as an

alternative to labelling in the country of origin;

(f) if it considers that the protection of public health and the environment, the protection against

deceptive practices and any other legitimate objectives under the TBT Agreement are not

compromised thereby, it shall endeavour to accept non-permanent or detachable labels, rather

than labels physically attached to the product, or inclusion of relevant information in the

accompanying documentation.

3. Paragraph 2 shall not apply to marking or labelling of medicinal products.

4. If a Party considers that marking or labelling requirements for a product or a sector in the

other Party could be improved, it may propose a trade-facilitating initiative to address its concerns

in conformity with Article 13.5.

& /en 200

ARTICLE 13.11

Cooperation and technical assistance

1. To contribute to the fulfilment of the objectives of this Chapter, each Party shall, inter alia:

(a) promote cooperation and joint activities and projects between their respective organisations,

public or private, national or regional, in the fields of technical regulations, standardisation,

conformity assessment, metrology and accreditation;

(b) promote good regulatory practices through the exchange of information, experiences and best

practices about, inter alia, regulatory impact assessment, regulatory stock management and

risk assessment and public consultation;

(c) exchange views on market surveillance;

(d) strengthen the technical and institutional capacity of the national regulatory, metrology,

standardisation, conformity assessment and accreditation bodies, supporting the development

of their technical infrastructure, including laboratories and testing equipment, and sustaining

the continuous training of human resources;

(e) promote, facilitate and, whenever possible, coordinate their participation in international

organisations and other fora related to technical regulations, conformity assessment,

standards, accreditation and metrology;

& /en 201

(f) support technical assistance activities by national, regional and international organisations in

the areas of technical regulations, standardisation, conformity assessment, metrology and

accreditation; and

(g) endeavour to share available scientific evidence and technical information among regulatory

authorities of the Parties, to the extent necessary to cooperate or pursue technical discussions

under this Chapter, with the exception of confidential or other sensitive information.

2. A Party shall give appropriate consideration to proposals of the other Party for cooperation

under this Chapter.

ARTICLE 13.12

Technical discussions

1. Each Party may request to discuss any concern that arises under this Chapter, including any

draft or proposed technical regulation or conformity assessment procedure of the other Party that

the Party considers might significantly adversely affect trade between the Parties. The requesting

Party shall deliver its request to the TBT Chapter coordinator of the other Party nominated pursuant

to Article 13.13 and shall identify:

(a) the issue;

(b) the provisions of this Chapter to which the concerns relate; and

(c) the reasons for the request, including a description of the requesting Party's concerns.

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2. Any information or explanation requested in accordance with paragraph 1 shall be provided

no later than 60 (sixty) days after the date of the request of a Party in accordance with paragraph 1.

The deadline may be extended with prior justification by the requested Party.

3. If an issue has been previously addressed between the Parties in any forum, a Party may

request directly a discussion, in person or via video or teleconference, no later than 60 (sixty) days

after the date of such request. In such cases, the requested Party shall make every effort to be

available for such discussion.

4. If the Parties have not had a discussion under this Article in the previous 12-month period, the

request may not be refused by the other Party. If the requesting Party believes that the matter is

urgent, it may request that a meeting take place within a shorter timeframe. In such cases, the

responding Party shall give positive consideration to such a request. The Parties shall make every

attempt to arrive at a mutually satisfactory resolution of the matter.

5. For greater certainty, a Party may request technical discussions with the other Party pursuant

to paragraph 2 also with regard to technical regulations or conformity assessment procedures of

national, regional or local governments, as the case may be, on the level directly below that of the

central government that may have a significant effect on trade.

6. Following the technical discussion, the Parties may conclude that the issue could be better

addressed through a trade-facilitating initiative, in accordance with Article 13.5.

7. This Article is without prejudice to a Party's rights and obligations under Chapter 29.

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ARTICLE 13.13

TBT Chapter coordinator

1. Each Party shall nominate a TBT Chapter coordinator and notify the other Party in the event

of any changes. The TBT Chapter coordinators shall work jointly to facilitate the implementation of

this Chapter and cooperation between the Parties in all TBT matters.

2. The functions of the TBT Chapter coordinators include:

(a) supporting the Subcommittee on trade in goods, referred to in Article 13.14, in the exercise of

the functions;

(b) supporting trade-facilitating initiatives and technical discussions, as appropriate, in

accordance with Articles 13.5 and 13.12 respectively;

(c) exchanging information on work undertaken in non-governmental, regional and multilateral

fora related to standards, technical regulations and conformity assessment procedures; and

(d) reporting any relevant development related to the implementation of this Chapter to the

Subcommittee on trade in goods, referred to in Article 13.14, whenever appropriate.

3. The TBT Chapter coordinators shall communicate with one another by any agreed method

that is appropriate to carry out their functions, which may include email, teleconferences, video

conferences and meetings.

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ARTICLE 13.14

Subcommittee on trade in goods

The Subcommittee on trade in goods, established pursuant to Article 9.9(4), shall have the

following functions, in addition to those listed in Articles 2.4, 9.9 and 10.14:

(a) discuss the results of the work carried out pursuant to Article 13.5 and consider appropriate

actions;

(b) provide a forum for the Parties to discuss the need to take steps to ensure reciprocity in

accordance with Article 13.8(8);

(c) foster cooperation in accordance with Article 13.11 and support technical discussions, as

appropriate, in accordance with Article 13.12;

(d) endeavour to discuss at least annually the issues covered under paragraph 2 of Section C of

Annex 13-B; and

(e) provide a forum for the Parties to cooperate and exchange information on any issues relevant

for the implementation of Annex 13-B.

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CHAPTER 14

SANITARY AND PHYTOSANITARY MEASURES

ARTICLE 14.1

Objectives

The objectives of this Chapter are to:

(a) protect human, animal or plant life or health in the territory of the Parties while facilitating

trade between the Parties in so far as sanitary and phytosanitary (hereinafter referred to

as "SPS") measures are concerned;

(b) establish cooperation on the implementation of SPS Agreement;

(c) ensure that SPS measures do not create unjustified barriers to trade between the Parties;

(d) enhance cooperation on technical and scientific issues related to the adoption and application

of SPS measures;

(e) improve the exchange of information and consultations between the Parties on SPS matters;

and

& /en 206

(f) establish cooperation concerning multilateral fora dealing with SPS matters.

ARTICLE 14.2

Scope

1. This Chapter applies to all SPS measures1 that may, directly or indirectly, affect trade

between the Parties.

2. This Chapter applies to cooperation concerning multilateral fora dealing with SPS matters.

ARTICLE 14.3

Definitions

1. For the purposes of this Chapter, the following definitions apply:

(a) the definitions set out in Annex A of the SPS Agreement;

(b) the definitions adopted by the Codex Alimentarius;

(c) the definitions adopted by the World Organisation for Animal Health (hereinafter referred to

as the "OIE");

1 In case of conflict, this Chapter prevails over other Chapters of this Part of the Agreement

when applied to SPS measures, including when such measures are part of a measure.

& /en 207

(d) the definitions adopted by the International Plant Protection Convention (hereinafter referred

to as the "IPPC"); and

(e) "protected zone" means an officially defined geographical part of the territory of the European

Union in which a specific regulated pest is known not to be established in spite of favourable

conditions and its presence in other parts of the territory of the European Union.

Protected zones are pest-free areas under European Union control in the European Union

territory. They are recognised by Regulation (EU) 2016/2031 of the European Parliament of

the Council of 26 October 2016 on protective measures against pests of plants, amending

Regulations (EU) No 228/2013, (EU) No 652/2014 and (EU) No 1143/2014 of the European

Parliament and of the Council and repealing Council Directives 69/464/EEC, 74/647/EEC,

93/85/EEC, 98/57/EC, 2000/29/EC, 2006/91/EC and 2007/33/EC1. This concept is not

applied outside the European Union territory. For trade purposes, the European Union shall

not require the other Party to establish protected zones in its territory. In such cases, the

conditions of pest-free areas shall apply. For the purposes of Chapter 6 and for the recognition

of protected zones, the same conditions as for pest-free areas shall apply.

2. In the event of any inconsistency between the definitions in Annex A to the SPS Agreement

and the definitions agreed by the Parties or the definitions adopted by the Codex Alimentarius, OIE

and IPPC, the definitions set out in Annex A of the SPS Agreement shall prevail.

1 OJ EU L 317, 23.11.2016, p. 4.

& /en 208

ARTICLE 14.4

Rights and obligations

The Parties affirm their rights and obligations under the SPS Agreement. Nothing in this Chapter

shall affect the rights and obligations of each Party under the SPS Agreement.

ARTICLE 14.5

Competent authorities

1. For the purposes of this Chapter, the official competent authority of a Party is the authority

that, in accordance with a Party's law, is empowered to enforce its laws and regulations falling

within the scope of this Chapter to ensure compliance with its requirements, or any other authority

to which those authorities have delegated that power (hereinafter referred to as "competent

authorities").

2. Upon the date of entry into force of this Agreement, each Party shall provide in writing to the

other Party the name of the competent authorities referred to in paragraph 1, specifying where this

information is made publicly available and a description of the distribution of competences between

the respective competent authorities.

3. The Parties shall, in accordance with paragraph 4 of Article 14.11, inform each other of any

change to these competent authorities.

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ARTICLE 14.6

General obligations

1. Products exported from a Party shall meet the applicable SPS requirements of the

importing Party.

2. The SPS requirements of the importing Party shall be the same for the entire territory of the

exporting Party, as long as the same sanitary and phytosanitary conditions prevail throughout that

territory, without prejudice to decisions and measures adopted in accordance with Article 14.10.

Each Party shall ensure that their SPS measures are applied in a proportionate manner and do not

arbitrarily or unjustifiably discriminate between Member States of the European Union or Signatory

MERCOSUR States where identical or similar conditions prevail, including between its own

territory and that of the other Party. SPS measures shall not be applied in a manner which would

constitute a disguised restriction on trade between the Parties.

3. The procedures referred to in this Chapter shall be applied without undue delay and in a

transparent manner, and information requested shall be limited to what is necessary for appropriate

approval, control, inspection and verification purposes.

4. Each Party shall ensure that any fees imposed for import procedures to check and ensure the

fulfilment of SPS requirements are equitable in relation to any fees charged on like domestic

products or products originating in any other WTO Member and shall not be higher than the actual

cost of the service.

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5. Except as provided for in Article 14.14, when modifying SPS import requirements, each

Party, and where appropriate MERCOSUR, shall allow for a transitional period, taking into account

the nature of the modification, in order to avoid the unnecessary interruption or disruption of trade

flows of products and to allow the exporting Party to adjust its export procedures accordingly to

such modification.

6. The implementation of this Chapter shall not jeopardise the SPS requirements for trade

between the Parties existing at the date of entry into force of this Agreement.

7. Without prejudice to similar provisions in other Chapters of this Part of the Agreement,

nothing in this Chapter shall affect the rights and obligations of each Party to protect confidential

information, in accordance with each Party's relevant laws and regulations. Each Party shall ensure

that procedures are in place to prevent the disclosure of confidential information that is acquired

during procedures referred to in this Chapter.

8. Each Party shall ensure that the necessary resources are available for the effective

implementation of this Chapter.

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ARTICLE 14.7

Trade-facilitation measures

Approval of establishments for the import of animals, animal products, products of animal origin

and animal by-products

1. The importing Party may require the approval of establishments situated in the territory of the

exporting Party for the import of animals, animal products, products of animal origin and animal

by-products from such establishments.

2. Such approval shall be granted without prior inspection of individual establishments by the

importing Party if:

(a) the importing Party has recognised the official control system of the competent authority of

the exporting Party;

(b) the importing Party has authorised the import of the concerned products; and

(c) the competent authority of the exporting Party has provided sufficient guarantees that such

establishments comply with the sanitary requirements of the importing Party.

3. The exporting Party shall only authorise exports from approved establishments as referred to

in paragraph 1. The exporting Party shall suspend or withdraw its approval of establishments that do

not comply with the sanitary requirements of the importing Party and shall notify such suspension

or withdrawal to the importing Party.

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4. The exporting Party shall propose to the importing Party a list of establishments to be

approved. This list shall be accompanied by guarantees of the competent authority of the exporting

Party that the establishments comply with the guarantees referred in to point (c) of paragraph 2.

5. The importing Party shall authorise imports from approved establishments no later

than 40 (forty) working days after the receipt of the list and guarantees referred to in in paragraph 4

of the exporting Party. If additional information is requested and as a result an authorisation cannot

be granted within the deadline of 40 (forty) working days, the importing Party shall inform the

exporting Party and establish a new deadline for such authorisation. That deadline shall not

exceed 40 (forty) working days after the receipt of the additional information.

6. The importing Party shall draw up lists of approved establishments and shall make those lists

publicly available.

7. The importing Party may refuse the approval of establishments that are not compliant with its

sanitary requirements. In such cases, the importing Party shall inform the exporting Party about

such refusal, including the justification therefor.

8. The importing Party may carry out verifications of the official control system in accordance

with Article 14.15. Based on the results of these verifications, the importing Party may amend the

lists of approved establishments.

SPS import checks

9. Each Party shall adopt or maintain procedures relating to SPS import checks allowing for the

expedited release of products for import without undue delay.

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10. Each Party shall, where appropriate, simplify controls and verifications and reduce the

frequency of the SPS import checks made by the importing Party on products of the exporting

Party. Each Party shall base its decision on the following:

(a) the risks involved;

(b) the controls carried out by the producers or importers which are validated by the competent

authorities of the Parties;

(c) the guarantees given by the competent authority of the exporting Party that the establishments

comply with the sanitary requirements of the importing Party; and

(d) the international guidelines, standards and recommendations of the Codex Alimentarius, OIE

or IPPC, as applicable.

11. Each Party may apply other criteria to simplify the controls and verifications pursuant to

paragraph 10 if they do not undermine the commonly agreed criteria that are listed therein.

12. If import checks reveal non-compliance with SPS import requirements and products or

consignments are rejected, the importing Party shall notify the exporting Party thereof in

accordance with the procedure referred to in Article 14.12, as soon as possible and no later

than 5 (five) working days after the date of the rejection.

13. If import checks reveal non-compliance with the relevant SPS import requirements, the action

taken by the importing Party shall be justified, based on the identified non-compliance, and not

more trade-restrictive than required to achieve the Party's appropriate level of sanitary or

phytosanitary protection.

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Simplification of the import and approval procedures of MERCOSUR

14. The Parties recognise the different levels reached by regional integration processes within the

European Union, on the one hand, and MERCOSUR on the other. With a view to facilitating trade

between their respective territories, MERCOSUR shall make its best efforts to gradually adopt for

import and approval procedures for products and establishments of the European Union, if

applicable:

(a) one single questionnaire;

(b) one single certificate; and

(c) one list of approved establishments.

15. MERCOSUR will make its best efforts to harmonise the SPS import requirements, certificates

and import checks of the individual Signatory MERCOSUR States.

ARTICLE 14.8

Alternative measures

1. Upon request of the exporting Party, the importing Party shall examine whether exceptionally

an alternative SPS measure to the SPS measure of the importing Party ensures the appropriate level

of protection of the importing Party. The alternative measure may be based on international

guidelines, standards and recommendations of the Codex Alimentarius, OIE or IPPC or on

SPS measures of the exporting Party.

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2. Article 14.9 shall not apply to alternative SPS measures.

ARTICLE 14.9

Equivalence

1. An exporting Party may request a determination of equivalence from the importing Party that

a specific SPS measure or specific SPS measures related to a product or group of products or on a

system-wide basis is equivalent to its own SPS measures.

2. In order to implement this Article, the Subcommittee, referred to in Article 14.18, shall make

recommendations to establish a procedure for the recognition of equivalence based on the Decision

on the implementation of Article 4 of the Agreement on Sanitary and Phytosanitary Measures of the

WTO Committee on Sanitary and Phytosanitary Measures1 and any subsequent updates thereof, and

international guidelines, standards and recommendations adopted in the framework of the Codex

Alimentarius, OIE and IPPC. This procedure should include a process whereby the Parties hold

consultations in order to determine the equivalence of SPS measures, the information to be required

from the Parties, the responsibilities of the Parties and the deadlines for the recognition of

equivalence.

3. Upon receipt of a specific request, the Parties shall enter into consultations based on the

procedure to be established pursuant to paragraph 2, with the aim of achieving an agreement on

recognition of equivalence.

1 WTO Document G/SPS/19/Rev.2, dated 13 July 2004.

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4. Upon request of the exporting Party, the importing Party shall inform the exporting Party of

the stage of the procedure for the assessment of equivalence.

ARTICLE 14.10

Recognition of animal health and plant pest status and regional conditions

1. The Parties recognise the concept of zoning and compartmentalisation, including pest free

areas or disease free areas and areas of low pest or low disease prevalence and shall apply it in the

trade between the Parties, in accordance with the SPS Agreement, including the Guidelines to

further the practical implementation of Article 6 of the Agreement on the Application of Sanitary

and Phytosanitary measures adopted by the WTO Committee on Sanitary and Phytosanitary

Measures1 and the relevant guidelines, recommendations and standards of the OIE or IPPC.

2. At the request of the exporting Party, the importing Party shall decide whether to recognise

pest and disease free areas, areas of low pest and low disease prevalence and compartments of the

exporting Party, whether for the first time or after an outbreak of an animal disease or a plant pest.

The importing Party shall base this decision on the information provided by the exporting Party in

accordance with the SPS Agreement and OIE and IPPC standards, and take into account the

establishment of pest and disease free areas, areas of low pest and low disease prevalence and

compartments by the exporting Party. The Parties shall follow the procedures set out in

Annex 14-A.

1 WTO Document G/SPS/48, dated 16 May 2008.

& /en 217

3. The decision of the importing Party pursuant to paragraph 2 shall be taken without undue

delay. If, without prejudice to Article 14.14, the importing Party decides to recognise pest and

disease free areas, areas of low pest and low disease prevalence and compartments of the exporting

Party, it shall allow trade from those areas or compartments without undue delay.

4. The Subcommittee, referred to in Article 14.18, may define further details for the procedure

for the recognition of pest and disease free areas, areas of low pest and low disease prevalence and

compartments set out in paragraph 2, taking into account the SPS Agreement and the guidelines,

standards and recommendations of the IPPC and OIE.

Animals, animal products, products of animal origin and animal by-products

5. The procedure for the recognition of the disease free zones or compartments for animals,

animal products, products of animal origin and animal by-products is set out in paragraphs 7 to 9

and in Annex 14-A.

6. When establishing or maintaining the zones or compartments referred to in paragraph 2 for

animals, animal products, products of animal origin and animal by-products, the Parties shall

consider factors such as geographical location, ecosystems, epidemiological surveillance and the

effectiveness of sanitary controls.

7. No later than 60 (sixty) working days after the receipt of the information referred to in

paragraph 2 from the exporting Party, the importing Party may:

(a) explicitly object to the request for recognition of disease-free zones or compartments for

animals, animal products, products of animal origin and animal by-products;

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(b) request additional information from the exporting Party; or

(c) request verifications pursuant to Article 14.15.

The importing Party shall assess any additional information no later than 30 (thirty) working days

after its receipt. If verifications are required by the importing Party, the deadline for assessing the

additional information shall be interrupted.

8. The importing Party shall expedite the procedure established in paragraph 7 if the zones or

compartments for which recognition is sought by the exporting Party are officially recognised by

the OIE as having disease free status or if disease-free status has been recovered after an outbreak.

9. If after following the procedure in paragraph 7, the importing Party decides not to recognise

the zones or compartments for which recognition was sought by the exporting Party, it shall notify

its decision to the exporting Party and explain the reasons for not recognising the zones or

compartments concerned and, upon request, hold consultations in accordance with Article 14.13.

Plants and plant products

10. Each Party shall establish a list of regulated pests and regulated plants and plant products for

which phytosanitary requirements exist. The importing Party shall make available to the other Party

its list of regulated pests, and regulated plants and plant products and the phytosanitary import

requirements that apply thereto. The phytosanitary import requirements for regulated plants and

plant products shall be limited to what is necessary to protect plant health or safeguard the intended

use of the plants and plant products. The importing Party shall inform the other Party about any

required additional declaration.

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11. The phytosanitary requirements of the importing Party shall be established taking into account

the phytosanitary status in the exporting Party and, if required by the importing Party, the result of a

pest risk analysis (hereinafter referred to as "PRA"). The PRA shall be carried out in accordance

with the relevant International Standards for Phytosanitary Measures (hereinafter referred to

as "ISPM") of the IPPC. Such risk analysis shall take into account available scientific and technical

information as well as the intended use of the plants and plant products under consideration.

12. The importing Party shall update the lists referred to in paragraph 10 when the exporting Party

makes a request to export new products to the other Party. When the importing Party requires a

PRA to authorise the import of a certain product, in order to expedite the process, a PRA already

carried out for the same or similar products may be used as a basis, together with any additional

information that the importing Party considers necessary to be analysed.

13. The importing Party, when conducting the process for the determination of the pest status of

the exporting Party, shall take into account paragraphs 10 to 17 of this Article, Annex 14-A and the

recommendations of the ISPM of the IPPC.

14. The Parties recognise the concepts of pest free areas, pest free places of production and pest

free production sites, as well as areas of low pest prevalence as specified in the ISPM of the IPPC,

and of protected zones which they shall apply in trade between them.

15. When establishing or maintaining phytosanitary measures, the importing Party shall take into

account pest free areas, pest free places of production, pest free production sites and areas of low

pest prevalence, as well as protected zones if they are established by the exporting Party.

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16. The exporting Party shall communicate pest free areas, pest free places of production, pest

free production sites or areas of low pest prevalence to the other Party and provide, upon request, an

explanation and supporting information as provided for in the relevant ISPM or as otherwise

deemed appropriate. Unless the importing Party:

(a) explicitly objects to the request for approval of pest free areas, pest free places of production,

pest free production sites or areas of low pest prevalence to the other Party or protected zones

if they are established by the exporting Party;

(b) requests additional information from the exporting Party;

(c) requests verifications pursuant to Article 14.15; or

(d) initiates consultations pursuant to Article 14.13 no later than 150 (one hundred and fifty)

working days after receiving such information, the status of the exporting Party shall be

recognised by the importing Party.

17. The importing Party shall assess any additional information requested pursuant to

paragraph 16 no later than 90 (ninety) days after its receipt. Any verifications requested by the

importing Party pursuant to paragraph 16 shall be carried out in accordance with Article 14.15

taking into account the biology of the pest and the plant concerned. If the importing Party requests

such verifications, the deadline for assessing additional information shall be interrupted.

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18. If, after following the procedure in paragraph 16, the importing Party decides not to approve

pest free areas, pest free places of production, pest free production sites or areas of low pest

prevalence or protected zones if they are established by the exporting Party for which recognition

was sought by the exporting Party, it shall notify its decision to the exporting Party and explain the

reasons for not approving them and, upon request, hold consultations in accordance with Article

14.13.

ARTICLE 14.11

Transparency and exchange of information

1. Upon request of a Party and no later than 15 (fifteen) working days after the date of such

request, the Parties shall exchange information on:

(a) procedures for the authorisation to import a product, including, if possible, the expected

timeframe;

(b) requirements for the import of specific products, including the model for a certificate, as

appropriate;

(c) their pest status, including surveillance, eradication and containment programmes and the

results thereof in order to support such pest status and import phytosanitary measures;

(d) the stage of progress of the procedure for import approval of specific products; and

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(e) the relationship between a SPS measure and the international guidelines, standards and

recommendations and, if an SPS measure is not based on international guidelines, standards

and recommendations, the scientific information as to how the SPS measure is not in

conformity with international guidelines, standards and recommendations and an explanation

of the reasons for such measure.

2. In cases where the relevant scientific evidence is insufficient, a Party adopting a provisional

SPS measure shall provide the available pertinent information on which the measure is based and, if

available, additional information for a more objective assessment of the risk, and shall review the

SPS measure within a reasonable period of time.

3. The Parties shall make publicly available, by any means, updated information about their:

(a) SPS import requirements and approval procedures; and

(b) a list of regulated pests.

4. The Parties shall inform each other of:

(a) any change in the sanitary and phytosanitary status that may affect trade between the Parties;

(b) matters related to the development and application of SPS measures that may affect trade

between the Parties; and

(c) any other information relevant for the effective implementation of this Chapter.

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5. Without prejudice to paragraph 1, if the information referred to in this Article has been made

available by the Parties through a notification to the WTO or to the relevant international

standard-setting body in accordance with its relevant rules, or on publicly accessible and free of

charge websites of the Parties, the exchange of information pursuant to paragraph 1 shall not be

required.

6. Each Party shall designate a contact point for communication on all matters covered by this

Chapter and inform the other Party thereof no later than 1 (one) month after the date of entry into

force of this Agreement. Each Party shall promptly notify the other Party of any change to its

contact point.

ARTICLE 14.12

Notifications

1. Any serious or significant risk to human, animal or plant life or health, including any food or

feed control emergencies, shall be notified to the contact points of the other Party designated in

Article 14.11, within 2 (two) working days from the identification of that risk.

2. Risks to human, animal or plant life or health which are not serious shall also be notified to

the contact points of the other Party within a reasonable period of time that is sufficient to avoid

threatening human, animal or plant life or health or jeopardising existing trade between the Parties.

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3. Notifications referred to in paragraphs 1 and 2 shall be done through an established system of

notifications or through specific ad hoc notifications, in accordance with the legislation of the

notifying Party. In both cases, the notification shall be sent to the competent authorities of the

concerned Parties.

4. If the notifying Party adopts or maintains any SPS measure in relation to the notification

(including the rejection of a product or consignment), that notification shall be accompanied by an

explanation of the reasons justifying such measure.

5. The notifying Party shall withdraw any notification based upon information which is

subsequently found to be unsubstantiated or which was transmitted erroneously. Such withdrawal

shall take place as soon as possible, and be notified to the exporting Party, in order to avoid a

negative impact on trade between the Parties.

6. The Parties shall identify contact points for the notifications under this Article and inform the

other Party thereof, if they are not the same as the contact points identified pursuant to paragraph 6

of Article 14.11.

ARTICLE 14.13

Consultations

1. Without prejudice to Chapter 29, if the SPS measures or draft measures of the importing

Party, or the implementation thereof, are considered to be inconsistent with this Chapter, the Parties

shall enter into consultations no later than 60 (sixty) days after the exporting Party has introduced a

reasoned request for such consultations.

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2. Notwithstanding paragraph 1, if a notification has been made by a Party pursuant to

Article 14.12 or if a Party has serious concerns regarding a risk to public, animal or plant health,

affecting products traded between the Parties consultations shall, upon request of a Party, be held as

soon as possible. Each Party shall endeavour, in such conditions, to provide the information

necessary to avoid a disruption in trade, including a limitation thereof.

3. At the request of the exporting Party, the importing Party shall provide the information

necessary to avoid a disruption in trade, including a limitation thereof. Such information includes

the information referred to in Article 14.11(1).

4. Consultations may be held for a reasonable period of time that allows the Parties to reach a

mutually satisfactory solution.

5. Consultations may be held by e-mail, video, audio conference or any other means of

communication which are available to both Parties. The Party which requested consultations shall

be responsible for preparing the minutes. The minutes shall be formally approved by the parties to

the consultations.

6. If the parties to the consultations do not reach a mutually satisfactory solution, the matter may

be submitted to the Subcommittee, referred to in Article 14.18.

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ARTICLE 14.14

Emergency measures

1. If a Party adopts any measure to control any serious risks to human, animal and plant life or

health, such measure shall, without prejudice to paragraph 2, also aim to prevent the introduction of

any sanitary and phytosanitary risk into the territory of the other Party.

2. The importing Party may, in the event of serious risks to human, animal or plant life or health,

adopt emergency measures against such risks.

3. For products in transit between the Parties, the importing Party shall consider the most

suitable and proportional solution in order to avoid unnecessary disruptions to trade.

4. Measures referred to in paragraph 2 may be adopted without prior notification pursuant to

Article 14.12. The Party adopting emergency measures shall notify the other Party as soon as

possible of the adoption of these measures and, in any case, no later than 48 (forty-eight) hours

thereafter.

5. Each Party may request any information related to the sanitary and phytosanitary situation and

the emergency measures adopted. Each Party shall answer such requests as soon as the requested

information is available.

6. Upon request of either Party and in accordance with Article 14.13, the Parties shall hold

consultations regarding the emergency measure no later than 15 (fifteen) working days of the

notification of the emergency measures. The Parties may consider options to facilitate the

implementation, or the replacement, of the emergency measures.

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ARTICLE 14.15

Verifications of the official control system

1. Each Party, within the scope of this Chapter, has the right to:

(a) carry out verifications, including audits, of the official control system of the other Party,

including verification visits; and

(b) receive information about the official control system of the other Party and the results of the

controls carried out under that system.

2. The nature and frequency of verifications, including audits, shall be determined by the

importing Party, taking into account the import requirements, the inherent characteristics of the

product concerned, the track record of past import checks and other available information, such as

audits and inspections undertaken by the competent authority of the exporting Party.

3. The objective of the verifications shall be to evaluate the capacity of the competent authorities

of the exporting Party to ensure that the products exported or to be exported meet the SPS

requirements of the importing Party.

4. Verification visits shall be carried out without undue delay and be notified to the exporting

Party at least 60 (sixty) working days before such verifications are carried out, except in cases of

emergency or if the Parties decide otherwise. Any modification to the date of the visit shall be

agreed by the Parties.

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5. Verifications shall be conducted in accordance with the audit plan agreed by the Parties

concerned, based on the Guidelines for the Design, Operation, Assessment and Accreditation of

Food Import and Export Inspection and Certification Systems1. The importing Party shall provide to

the other Party the reasons for any modification to the audit plan of the visit.

6. The expenses incurred by the Party carrying out the verification shall be borne by that Party.

7. The Party carrying out the verification shall send a draft report on the verification to

the Party subject to the verification no later than 60 (sixty) working days after the end of the

verification visit. The Party subject to the verification may comment on the draft report no later

than 60 (sixty) working days after its receipt. Comments and an action plan, if required, shall be

attached to the final report. The Party carrying out the verification shall send the final report to the

Party subject to the verification no later than 30 (thirty) working days after the receipt of the

comments on the draft report.

8. Any measure taken as a consequence of verifications shall be proportionate to shortcomings

or risks identified. If requested, technical consultations regarding the matter shall be held in

accordance with Article 14.13.

9. If a significant public, animal or plant health risk has been identified during the verification,

the Party subject to the verification shall be informed as quickly as possible and, in any case, no

later than 10 (ten) working days after the end of the verification.

1 FAO, CAC/GL 26-1997.

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ARTICLE 14.16

Cooperation on multilateral fora

1. The Parties shall promote cooperation between them on all the multilateral fora relevant for

SPS issues, in particular in international standard-setting bodies recognised in the framework of the

SPS Agreement and shall exchange information to that end.

2. The Subcommittee on SPS matters, referred to in Article 14.18, shall be the forum for

promoting cooperation as referred to in paragraph 1.

ARTICLE 14.17

Cooperation

1. The Parties shall endeavour to cooperate in implementing this Chapter and to optimise the

results thereof with a view to expanding opportunities and obtaining the greatest benefits for the

Parties. Such cooperation shall be developed within the legal and institutional framework governing

cooperation relations between the Parties.

2. To achieve the objectives referred to in paragraph 1, the Parties shall give consideration to the

cooperation needs identified by the Subcommittee on SPS matters, referred to in Article 6.18.

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ARTICLE 4.18

Subcommittee on SPS matters

1. The Subcommittee on SPS matters, established pursuant to Article 9.9(4), shall meet for the

first time no later than 1 (one) year after the entry into force of this Agreement.

2. The Subcommittee shall have the following functions, in addition to those listed in

Articles 2.4 and 9.9:

(a) provide a forum to discuss problems arising from the application of the SPS measures with a

view to reaching mutually acceptable solutions provided that the Parties have first attempted

to address them through technical consultations pursuant to Article 14.13 and the matter has

then been referred to the Subcommittee.

(b) provide a forum to discuss the information exchanged in accordance with Article 14.11;

(c) promote exchange of information and cooperation on multilateral fora pursuant to

Article 14.16;

(d) exchange the lists of contact points pursuant to Article 14.11(6) to share information related to

this Chapter;

(e) conduct the preparatory internal work necessary for the amendment of Annex 14-A by the

Joint Council in trade configuration;

(f) make recommendations to establish a procedure for the recognition of equivalence in

accordance with Article 14.9(2);

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(g) may define further details for the procedure for the recognition of pest and disease free areas,

areas of low pest and low disease prevalence and compartments in accordance with

Article 14.10(4); and

(h) identify cooperation needs in implementing this Chapter, pursuant to Article 14.17(2).

ARTICLE 14.19

Special and differential treatment

In accordance with Article 10 of the SPS Agreement, if Paraguay identifies difficulties with a

proposed measure notified by the European Union, Paraguay may request, in its comments

submitted to the European Union, pursuant to Annex B to the SPS Agreement, an opportunity to

discuss the issue. The European Union and Paraguay shall, without prejudice to Article 14.13, enter

into consultations in order to agree on:

(a) alternative import conditions to be applied by the importing Party in accordance with

Article 14.8 of this Chapter;

(b) the provision of technical assistance in accordance with Article 14.17 of this Chapter; or

(c) a transitional period of 6 (six) months for proposed measures to apply to products from

Paraguay, which could be exceptionally extended for another period of no longer

than 6 (six) months.

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CHAPTER 15

DIALOGUES ON ISSUES RELATED TO THE AGRI-FOOD CHAIN

ARTICLE 15.1

Objectives

With a view to strengthen their mutual trust and respective understanding, the Parties shall establish

dialogues and exchange information on the following subjects:

(a) animal welfare;

(b) application of agricultural biotechnology;

(c) combating antimicrobial resistance (hereinafter referred to as "AMR"); and

(d) scientific matters related to food safety, animal and plant health.

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ARTICLE 15. 2

Subcommittee on dialogues on issues related to the agri-food chain

The Subcommittee on dialogues on issues related to the agri-food chain, established pursuant to

Article 9.9(4), shall in addition to functions listed in Articles 2.4, 9.9 and 15.7, meet at expert level

to conduct the dialogues referred to in Article 15.1.

ARTICLE 15.3

Animal welfare

Recognising that animals are sentient beings, the Subcommittee on dialogues on issues related to

the agri-food chain shall conduct a dialogue covering, inter alia, the following matters:

(a) specific topics on animal welfare that may affect mutual trade;

(b) exchange of information, expertise and experiences in the field of animal welfare to improve,

to the benefit of the Parties, their respective approaches on regulatory standards related to the

breeding, holding, handling, transportation and slaughter of animals;

(c) strengthening of their research collaboration; and

(d) collaboration in international fora with a view to promoting the further development of

international standards on animal welfare by the OIE and best animal welfare practices and

their implementation.

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ARTICLE 15.4

Agricultural biotechnology

The Subcommittee on dialogues on issues related to the agri-food chain shall conduct a dialogue on

agricultural biotechnology that will cover, among others, the following matters:

(a) exchange of information on policies, legislation, guidelines, good practices and projects on

biotechnology products;

(b) discussions on specific topics related to biotechnology that may affect mutual trade, including

cooperation on genetically modified organisms (hereinafter referred to as "GMOs") testing;

(c) exchange of information on topics related to asynchronous authorisations of GMOs in order to

minimise the possible impact on trade;

(d) exchange of information on the economic and trade outlook for authorisations of GMOs; and

(e) exchange of information on cases of low-level presence of GMOs non-authorised by the

importing Party but authorised by the exporting Party.

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ARTICLE 15.5

Combating antimicrobial resistance

The Subcommittee on dialogues on issues related to the agri-food chain shall conduct a dialogue on

combatting antimicrobial resistance that will cover, among others, the following matters:

(a) collaboration to follow up on existing and future guidelines, standards, recommendations and

actions developed in relevant international organisations, initiatives and national plans aiming

to promote the prudent and responsible use of antibiotics and in relation to animal production

and veterinary practices;

(b) collaboration in the implementation of the recommendations of the OIE, World Health

Organisation (hereinafter referred to as "WHO") and Codex Alimentarius, in particular the

Code of Practice to Minimize and Contain Foodborne Antimicrobial Resistance

(CAC/RCP 61-2005);

(c) exchange of information on good farming practices;

(d) the promotion of research, innovation and development; and

(e) the promotion of multidisciplinary approaches to combat AMR, including the "One Health"

approach of the WHO, OIE and Codex Alimentarius.

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ARTICLE 15.6

Scientific matters related to food safety, animal and plant health

1. The Parties should foster cooperation between their respective official scientific bodies

responsible for food safety, animal and plant health science. Such cooperation shall aim to deepen

the scientific information available to the Parties in order to support their respective approaches on

regulatory standards that may affect mutual trade.

2. The Subcommittee shall conduct a dialogue on scientific matters related to food safety,

animal and plant health that will cover, among others, the following matters:

(a) exchange of scientific and technical information on food and feed safety, animal and plant

health areas, including risk assessment and the scientific information supporting the

establishment of maximum residue levels;

(b) collection of data; and

(c) collaboration in the building of a common understanding regarding OIE, IPPC and the Codex

Alimentarius standards.

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ARTICLE 15.7

Additional provisions

1. The Parties shall ensure that the activities of the Subcommittee, referred to in Article 15.2, do

not endanger the independence of their respective national or regional agencies. The Subcommittee

on dialogues on issues related to the agri-food chain shall establish the rules on conflicts of interest

for the participants of its meetings.