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Chapter 1: Initial Provisions and Definitions

Section A: Initial Provisions

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Article 1.1: Establishment of a Free Trade Area

Consistent with Article XXIV of GATT 1994 and Article V of GATS, the Parties hereby establish a free trade area in accordance with the provisions of this Agreement.

Article 1.2: Relation to Other Agreements

  1. Each Party affirms its existing rights and obligations with respect to each
    other under existing bilateral and multilateral agreements to which both Parties
    are party, including the WTO Agreement.
  2. This Agreement shall not be construed to derogate from any international
    legal obligation between the Parties that provides for more favourable treatment
    of goods, services, investments, or persons than that provided for under this
    Agreement.
  3. Unless otherwise provided in this Agreement, in the event of any inconsistency
    between this Agreement and other agreements to which both Parties are party,
    the Parties shall immediately consult with each other with a view to finding
    a mutually satisfactory solution, taking into consideration general principles
    of international law.

Article 1.3: Extent of Obligations

  1. In accordance with customary international law and unless otherwise provided
    in this Agreement, for the purposes of determining a Party's compliance with
    this Agreement, the exercise of, or failure to exercise, governmental authority
    of that Party:
    1. by a central, regional or local level of government; or
    2. delegated by a central, regional or local level of government,

    shall be considered an exercise of, or failure to exercise, governmental authority
    by a Party.

  2. For greater certainty, and unless otherwise provided in this Agreement,
    the national treatment obligations included in this Agreement shall apply
    to a central, regional and local level of government, and the treatment to
    be accorded by a Party at a regional or local level of government means treatment
    no less favourable than the most favourable treatment that the regional or
    local level of government accords to any goods, services, persons or investments
    of investors, as described in those national treatment obligations, of the
    Party of which it forms a part.

Section B: General Definitions

Article 1.4: Definitions

For the purposes of this Agreement, unless otherwise specified:

central level of government means:

  1. for Australia, the Commonwealth Government; and
  2. for Korea, the central level of government;

covered investment means, with respect to a Party, an investment,
as defined in relevant chapters, in its territory of an investor of the other
Party that is in existence as of the date of entry into force of this Agreement
or established, acquired, or expanded thereafter;

customs administration means:

  1. for Australia, the Australian Customs and Border Protection service, or
    its successor; and
  2. for Korea, the Korea customs service, or its successor;

customs duty includes any duty or charge of any kind imposed
on, or in connection with, the importation of a good of the other Party, including
any form of surtax or surcharge imposed on or in connection with such importation,
but does not include any:

  1. charge equivalent to an internal tax imposed consistently with Article III:2
    of GATT, or any equivalent provision of a successor agreement to which both
    Parties are party;
  2. additional customs duty collected as a result of a measure consistent with
    Chapter 6 (Trade Remedies);
  3. fee or other charge in connection with importation commensurate with the
    cost of service rendered; or
  4. premiums offered or collected on an imported good arising out of any tendering
    system in respect of the administration of quantitative import restrictions
    or tariff rate quotas established in Appendix 2-A-1;

Customs Valuation Agreement means the Agreement on Implementation
of Article VII of the General Agreement on Tariffs and Trade 1994,
in Annex
1A of the WTO Agreement;

days means calendar days;

enterprise means any entity constituted or organised under
applicable law, whether or not for profit, and whether privately or governmentally
owned or controlled, including any corporation, trust, partnership, sole proprietorship,
joint venture, association, or similar organisation;

enterprise of a Party means an enterprise constituted or organised
under the law of a Party;

existing means in effect on the date of entry into force of
this Agreement;

freely usable currency means "freely usable currency"
as determined by the International Monetary Fund under its Articles of Agreement;

GATS means the General Agreement on Trade in Services,
in Annex 1B of the WTO Agreement;

GATT 1994 means the General Agreement on Tariffs and Trade
1994,
in Annex 1A of the WTO Agreement;

goods of a Party means domestic products as these are understood
in GATT 1994 or such goods as the Parties may agree, and includes originating
goods of that Party;

government procurement means the process by which a government
obtains the use of or acquires goods or services, or any combination thereof,
for governmental purposes and not with a view to commercial sale or resale or
use in the production or supply of goods or services for commercial sale or
resale;

Harmonized System (HS) means the Harmonized Commodity Description
and Coding System governed by the International Convention on the Harmonized
Commodity Description and Coding System,
including its General Rules of
Interpretation, Section Notes and Chapter Notes, as adopted and implemented
by the Parties in their respective tariff laws;

Import Licencing Agreement means the Agreement on Import
Licencing Procedures,
in Annex 1A of the WTO Agreement;

Joint Committee means the Joint Committee established in Article
21.3 (Joint Committee);

local level of government means:

  1. for Australia, any government below a regional level of government; and
  2. for Korea, a local government as defined in the Local Autonomy Act;

measure includes any law, regulation, procedure, requirement,
or practice;

national means:

  1. for Australia, a natural person who is an Australian citizen as defined
    in the Australian Citizenship Act 2007 or a permanent resident as
    defined in accordance with the Migration Regulations 1994; and
  2. for Korea, a Korean national within the meaning of the Nationality Act;

originating means qualifying under the rules of origin set
out in Chapter 3 (Rules of Origin and Origin Procedures);

person means a natural person or an enterprise;

person of a Party means a national or an enterprise of a Party;

preferential tariff treatment means the duty rate applicable
under this Agreement to an originating good;

regional level of government means:

  1. for Australia, a state of Australia, the Australian Capital Territory, or
    the Northern Territory; and
  2. for Korea, "regional level of government" is not applicable;

Safeguards Agreement means the Agreement on Safeguards,
in Annex 1A of the WTO Agreement;

sanitary or phytosanitary measure means any measure referred
to in paragraph 1 of Annex A of the SPS Agreement;

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

state enterprise means an enterprise that is owned, or controlled
through ownership interests, by a Party1;

TBT Agreement means the Agreement on Technical Barriers
to Trade,
in Annex 1A of the WTO Agreement;

territory means:

  1. for Australia, the territory of Australia:
    1. excluding all external territories other than the Territory of Norfolk
      Island, the Territory of Christmas Island, the Territory of Cocos (Keeling)
      Islands, the Territory of Ashmore and Cartier Islands, the Territory of
      Heard Island and McDonald Islands, and the Coral Sea Islands Territory;
      and
    2. including Australia's territorial sea, contiguous zone, exclusive economic
      zone and continental shelf over which Australia exercises sovereign rights
      or jurisdiction in accordance with international law; and
  2. for Korea, the land, maritime, and air space under its sovereignty, and
    those maritime areas, including the seabed and subsoil adjacent to and beyond
    the outer limit of the territorial seas over which it may exercise sovereign
    rights or jurisdiction in accordance with international law and its law;

TRIPS Agreement means the Agreement on Trade-Related Aspects
of Intellectual Property Rights,
in Annex 1C of the WTO Agreement;

WTO means the World Trade Organization; and

WTO Agreement means the Marrakesh Agreement Establishing
the World Trade Organization,
done at Marrakesh on 15 April 1994.


1 For greater certainty, ownership, or control through ownership interests,
may be direct or indirect.

Last Updated: 24 September 2014
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