Entered into at Santiago, on 5 December, 1996, this Agreement was enacted in Chile through Supreme Decree Nº 1.200 issued by the Ministry of Foreign Affairs, on 3 July, 1997 and published in the Official Gazette on 5 July of the same year.

This Free Trade Agreement regulates various disciplines that had not been treated in previous trade agreements subscribed by Chile, attributable to a scheme of new generation agreements.

The Agreement is divided in five parts: the first contains general aspects, objectives and definitions; the second is related to trade in goods, regulation of market access of goods, rules of origin, customs procedures and emergency measures; the third governs cross-border trade in services, telecommunication, competition, monopolies and State enterprises and the entrance of businesspeople; the fourth comprises matters related to institutions and the administration of the Agreement, anti-dumping rights and settlement of disputes; the fifth governs general and special exceptions such as: national security, balance of trade, information dissemination, industrial and cultural matters.

For preferential treatment, the following goods qualify as originating:

• Goods wholly obtained or completely produced in the territory of one or both parties, including goods from the mineral, vegetable and animal kingdoms, and scrap and waste as a result of production, goods obtained in outer space and those produced only from originating material.
• Goods produced with non originating material, as long as they comply with the specific origin requirements, consisting in a change of tariff classification, regional content value or a combination of both, requirements which are established for each product listed in the respective annex.

The Agreement establishes an origin self-certification system, which means that the appropriate certificate is issued by the producer or exporter of the goods, under the format required for the completion instructions contained therein. Its effective date is equal to four years from the time of signing, and the exporter or producer is required to maintain all documentation related to the origin of the good during a period of 5 years.

Goods worth under US$ 1.000, with or without a commercial nature, are not required to be imported covered by a certificate of origin. In this case, Customs may require a declaration regarding the originating nature of the imported goods.

The Agreement considers special origin verification means, such as written questionnaires intended for exporters, verification visits and other procedures agreed by the parties.

The text provides for penal, civil and administrative sanctions applied as a result of infringements of rules and regulation that govern the above mentioned matters, specifically to exporters that declare false origins, the application of which brings legal consequences equivalent to those set for importers who make false declarations in violation of customs laws.

Customs Matters Related to Origin
The Agreement contains special rules for:

• Duty-free Temporary Admission of articles such as: business people s professional equipment, press equipment, commercial samples, advertising films, and sport equipment. The general requirements for the admission and duty-free entry of these goods are: entry in reasonable number, they cannot be sold or leased, they must return abroad within a reasonable time frame, they must be identifiable at check out. Each article is also subject to specific requirements.
• Temporary departure of goods to the territory of the other party for repair.
• Duty-free Regimen for importation of commercial samples and advertising material.
• Complete application of the Customs Valuation Code from the entry into force of the Agreement, without reservations or options.

The Agreement provides for a program that considers the tariff table almost entirely, covering 92.48% of the products for Chile, with an immediate tax reduction for over 80% of mutual trade.

The rest of trade is regulated in an asymmetric manner, with zero tariff for all Chilean products, within a time frame of 6 years, from the date of entry into force.

There is, nevertheless, a list of exceptions, specifically for milk and poultry products.

By means of the First Additional Protocol the tariffs agreed for various products were eliminated, such as: bird eggs, except from Gallus Domesticus; dry vetches as animal feed; cotton threads; synthetic threads; fabrics with synthetic filament; fabrics with artificial filaments; threads with discontinuous synthetic fiber.

» Text of the Agreement