EU s Rules of Origin. Screening Serbia, Explanatory Meeting, March 26-27, 2014 Brussels
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1 EU s Rules of Origin Screening Serbia, Explanatory Meeting, March 26-27, 2014 Brussels Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of the following information. The information reflects the situation at the time of the explanatory screening meeting. A great deal of additional information on the European Union is available on the Internet. It can be accessed through the Europa portal ( 1
2 Two types of origin Preferential origin : determines whether goods qualify for a favourable tariff treatment, based on o o Autonomous measures : GSP, ATM Agreements Non preferential origin : everything else, in particular : o o o Trade defense measures such as anti-dumping and countervailing measures Origin marking requirements Quota, public procurement, statistics 2
3 Content of this presentation 1. Non preferential origin 2. Preferential origin Autonomous arrangements: Generalised System of Preferences and Autonomous Trade Measures 3. Preferential origin - Agreements : pan-euro-mediterranean zone and Western Balkans; Ceuta and Melilla; Origin aspects of Customs Unions. 4. Preferential origin Trade regime for ACPs, OCTs + Free Trade Agreements 5. Binding Origin Information 3
4 1. Non preferential origin 4
5 Principles of non-preferential origin A country of origin always needs to be positively determined Only one country of origin Origin is conferred by the country where goods : Were wholly obtained (Art. 23 CCC), or Underwent their last substantial transformation (Art. 24 CCC) 5
6 Last Substantial Transformation Textiles and some other products: details in Implementing Provisions and Annexes 10 and 11 When not included in those Annexes : customs authorities of the Member States interpret Article 24 on case-by-case basis Agreement to use EU negotiating position of the WTO Harmonisation Program as guidelines for that interpretation 6
7 Last Substantial Transformation "List rules" Published on TAXUD web-site: rigin/non-preferential/article_410_en.htm No binding legal value; to be used as guidelines Comprehensive list, combining: Current legal provisions Agreed rules in WTO negotiations EU negotiating position 7
8 Checking of non preferential origin Indication in import declaration mandatory (not so for export) Verification same as other elements of declaration, based on risk analysis Possibility for customs authorities to require additional proof Documentary evidence (certificate) only in limited cases (TRQ for some agri products) 8
9 2.1. Autonomous arrangements: Generalized System of Preferences (GSP) 9
10 Commission Regulation on GSP rules of origin Commission Regulation (EEC) No 2454/93, amended by Commission Regulation (EU) No 1063/2010 adopted on (EU Official Journal No L 307 of , p. 1) and applicable from 1 January further amended by Commission Implementing Regulation (EU) No 530/2013 adopted on (EU Official Journal No L 159 of , p. 1) with effect as of 1 January
11 Main features of GSP rules of origin Origin determination criteria a maximum permitted content of non-originating materials change of tariff heading or sub-heading a specific working and processing operation the use of wholly obtained materials. The rules of origin are defined as far as possible on a sector-by-sector rather than a product-by-product basis. The rules applicable to products also take into account the specific situation of least developed countries (in general allowing a maximum content of non-originating materials of up to 70% or providing for an equivalent level of relaxation for products originating in the least developed countries) 11
12 Main features of GSP rules of origin (2) Applicability of cumulation of origin Bilateral cumulation EU-beneficiary country Regional cumulation with 4 regional groups Extended cumulation between a beneficiary country and a country with which the European Union has a free-trade agreement in force Cumulation of origin with industrial goods originating in Norway and Switzerland, extended to Turkey 12
13 Main features of GSP rules of origin (3) Main other features a flexible non-manipulation principle (Article 74); the general tolerance rule (15%), expressed as a percentage of weight for agricultural products and a percentage of ex-works price for other products (Article 79). Derogations: beneficiary countries may apply for derogations from standard rules of origin in case of natural catastrophes and on economic grounds. The EU is entitled to grant derogations on its own initiative. Such derogations are temporary and are subject to quantitative limitations. 13 Example of derogation from GSP rules of origin: certain processed fish products manufactured in Cape Verde (Commission Implementing Regulation (EU) No 440/2012 of 24 May 2012). The derogation is to expire on 31 December 2014).
14 New provisions, the application of which is deferred until 1 January 2017 A new self-certification system by exporters will replace the system of certification of origin by public authorities A Registered exporter system (REX) will be introduced for that purpose as of 1 January 2017 From 2017 onwards exporters will directly provide their customers with statements on origin Exporters will be registered with the competent authorities of the beneficiary countries in order to facilitate targeted post-export controls Each beneficiary country will use the system of registered exporters established by the European Commission European Union operators making exports for the purpose of bilateral cumulation of origin should be registered with the competent authorities in the Member States Registration is one-off act 14
15 GSP rules of origin More information is available on: in/preferential/article_781_en.htm GSP rules of origin user s guide: in/preferential/article_839_en.htm 15
16 List of notices to importers in force related to GSP rules of origin and those applicable horizontally on Imports of garlic into the Community (2005/C 197/05); on Imports of high-content sugar products into the Community (2007/C 265/07); on Imports of textile products from Bangladesh into the Community (2008/C 41/06); on Imports of tuna from Colombia and El Salvador into the EU (2010/C 132/05); on imports of tuna products from Thailand into the EU (2013/C 220/05). 16
17 2.2. Autonomous arrangements: Autonomous trade measures (ATMs) 17
18 ATM overview Beneficiary countries (or territories) benefit from the EU unilateral trade concessions subject to compliance with rules of origin provided for in Articles 66 and 98 to 123 of Regulation (EEC) No 2454/93 (Customs Code Implementing Provisions) 18
19 Special features of ATM rules of origin Bilateral cumulation (only for materials of EU origin) No derogation to territoriality principle No prohibition of duty drawback Only EU can issue a replacement EUR.1 Only EU can authorise approved exporters No accounting segregation No dispute settlement Validity of the proofs: 4 months 19
20 ATM for Western Balkans EU unilateral trade concessions on the basis of Council Regulation (EC) No 1215/2009 (as amended by R(EU) No 1336/2011): for fruits and vegetables: Albania, Bosnia and Herzegovina, former Yugoslav Republic of Macedonia, Montenegro, Serbia; for all products: Kosovo*. Possibility of temporary suspension of ATM for 3 months in case of fraud or failure to provide administrative assistance in verification of origin. Applicable until 31 December 2015 *This designation is without prejudice to positions on status, and is in line with UNSCR 1244 and the ICJ Opinion on the Kosovo Declaration of Independence
21 ATM for Moldova EU unilateral trade concessions on the basis of Council Regulation (EC) No 55/2008 (as amended by Regulation (EU) No 581/2011 of 8 June 2011) Possibility of temporary suspension of ATM for up to 6 months in case of fraud or if Moldova: systematically fails to comply with rules of origin, or fails to provide administrative assistance in verifying origin. Will expire on
22 3.1. Agreements: pan-euro-mediterranean zone 22
23 Pan-Euro-Med protocols applicable by the EU EEA EU-Morocco EU-Faeroe Islands EU-EFTA States EU-Israel EU- Egypt EU-Jordan EU-Tunisia EU-Algeria EU-Palestine EU-Turkey for industrial products for agricultural products for coal and steel products Notice containing the table showing the dates of application of diagonal cumulation in the pan-euro-med zone last published in OJ C 205 of , p.3 23
24 Agreements with protocols on rules of origin not identical to PEM rules of origin EU-Lebanon EU-Syria (pending the entry into force of the Association Agreement) 24
25 Future outlook The Regional Convention on preferential pan-euro-med rules of origin: Will replace circa 60 bilateral Pan-Euro-Med protocols on rules of origin in the Pan-Euro-Mediterranean zone Will base diagonal cumulation of origin on a single legal instrument Will include entire Western Balkan region in the pan-euro- Mediterranean zone of diagonal cumulation Published in the Official Journal L54 of
26 Notices to importers relating to countries/territories of pan-euro-med zone Imports from Israel into the EU (OJ C 232, 3/8/2012, p.5) Concerns imports of products produced in Israeli settlements located in the occupied Palestinian territories. 26
27 3.2. Agreements: Western Balkans 27
28 Overview Albania, Bosnia and Herzegovina (BA), the former Yugoslav Republic of Macedonia (fyrom), Montenegro, Serbia Kosovo participate in the EU Stabilisation and Association process and benefit from the preferential treatment in the EU. 28
29 Bilateral Agreements with Western Balkans Agreements providing for bilateral and diagonal cumulation among the EU, Western Balkans and Turkey: EC-Albania (Protocol 4 to SAA), EC-BA (Protocol 2 to Interim Agreement), EC-fYRoM (Protocol 4 to SAA), EC-Montenegro (Protocol 3 to SAA), EC- Serbia (Protocol 3 to Interim Agreement). No bilateral agreement with Kosovo (ATM only) Stabilisation and Association Agreement under negotiation 29
30 Features of diagonal cumulation with Western Balkans Notice containing the table showing the dates of application of diagonal cumulation between EU, TR and Western Balkan parties last published in OJ C 205 of p. 7) Kosovo does not participate in diagonal cumulation RoO are largely based on a model of pan-euro-med protocol, however: Diagonal cumulation zone is limited to the EU, Turkey and Western Balkans Proofs of origin: EUR.1 movement certificate and invoice declaration High content sugar products are excluded from diagonal/bilateral cumulation (Annex 5) Future outlook: Inclusion of the Western Balkans (including Kosovo) into the pan-euro-mediterranean cumulation zone with the entry into application of the Convention. 30
31 3.3. Ceuta and Melilla 31
32 Overview Ceuta & Melilla are not part of the EU customs territory Ceuta & Melilla are part of the Spanish territory Exemption of customs duties for trade in goods between the EU customs territory and Ceuta & Melilla (Protocol 2 of the Act of accession of Spain to the EC) 32
33 Ceuta and Melilla origin aspects RoO applied in trade between the EU and Ceuta & Melilla: Council Regulation (EC) No 82/2001 of 5 December 2000 (OJ L 20 of 20/01/2001) Reference to Ceuta & Melilla in all EU bilateral agreements: RoO applied in preferential trade between Ceuta & Melilla and the EU partner countries are the same as applied in preferential trade between the EU and those partner countries. Cumulation provisions for Ceuta & Melilla. Verification of origin on a case-by-case basis by Spanish authorities 33
34 3.4. Origin aspects of Customs Unions: Turkey, Andorra, San Marino 34
35 EC-Turkey Customs Union overview Customs Union for industrial and processed agricultural products as provided for in the Decision 1/95 of the EC-Turkey Association Council of (OJ L 35, ). Customs Union features: free movement of goods (A.TR. movement certificate is a proof of customs status); elimination of tariff and non-tariff measures; alignment of Turkey on EU common customs tariff, including preferential arrangements, and harmonisation of commercial policy measures. 35
36 EC-Turkey Customs Union origin aspects Goods in free circulation in the Customs Union can benefit from pan-euro- Mediterranean cumulation of origin in trade with third countries: On the basis of Decision No 1/2006 of the EC-Turkey Customs Cooperation Committee of (OJ L 265, ) 'supplier's declaration' and 'long-term supplier's declaration' are used by exporters as evidence of origin; accuracy or authenticity of a supplier s declarations is verified on the basis of INF 4 information certificate made out by supplier (Annex V to Council Regulation (EC) No 1207/2001) Acceptance of proofs of EC/Turkey origin issued in the partner countries of the pan- Euro-Mediterranean zone as proofs of Customs Union customs status for the purpose of free circulation (Article 17 of Decision No 1/2006 ). 36
37 RoO for products not covered by the EC- Turkey Customs Union EU-Turkey has preferential agreements (with standard pan-euro-med protocol) for: Agricultural products (Protocol 3 to Decision No 1/98 of the EC-Turkey Association Council) Coal and Steel products (Protocol 1 to the Agreement between the European Coal and Steel Community and the Republic of Turkey of 25 July 1996 on trade in products covered by the Treaty establishing the European Coal and Steel Community) 37
38 EU-Andorra Customs Union overview Customs Union for products of Chapter 25 to 97 HS (CU Agreement 1990) Preferential treatment for agricultural products (Chapters 1 to 24 HS) originating in Andorra, imported in the EU MFN treatment for products originating in the EU, imported in Andorra Preferential arrangement for some tobaccos manufactured in the EU, imported in Andorra (RoO laid down in Council Regulation (EC) No 2302/2001) 38
39 EU-Andorra Customs Union origin aspects Joint Declaration in EU preferential agreements Recognition of equivalent treatment of products originating in Andorra and products originating in the EU when imported in partner countries. Andorra applies EU RoO in its preferential trade (EC-Andorra Joint Committee Decision 1/2003) Subsequent verifications are carried out by designated EU customs offices (EC-Andorra Joint Committee Decision 1/2003) Andorra applies mutatis mutandis Reg. 1207/2001 (supplier s declaration) 39
40 RoO for products not covered by the EU- Andorra Customs Union RoO in EU-Andorra Preferential Arrangement on Agriculture (as last amended by EC-Andorra Joint Committee Decision No 1/1999): Bilateral cumulation Old list of minimal operations No derogation to principle of territoriality No accounting segregation 40
41 EU-San Marino Customs Union Customs Union covers all products except Coal and Steel No preferential arrangement based on origin Joint Declaration in EU preferential agreements Recognition of equivalent treatment of products originating in San Marino and products originating in the European Union when imported in partner countries. 41
42 4. Preferential origin Trade regime for ACPs, OCTs + Free Trade Agreements 42
43 Preferential origin Trade regime for ACPs, OCTs + Free Trade Agreements Countries of Africa, the Caribbean and the Pacific (ACP) Market Access Regulation (Council Regulation (EC) No 1528/2007) Overseas Countries and Territories (OCT Council Decision (2013/755/EU) Free Trade Agreements 43
44 Countries of Africa, the Caribbean and the Pacific (ACP) The rules of origin replacing those under the Cotonou Agreement have been settled in (interim) EPAs as well as a Trade and Development Cooperation Agreement with South Africa: West Africa (negotiations of the full EPA) Central Africa (negotiations of the full EPA, management of the interim agreement with Cameroon) CARIFORUM (management of the full EPA in place) SADC (full EPA negotiations with South African Development Community) ESA (management of the interim agreement with ESA, full EPA negotiations with Eastern and Southern Africa) EAC (full EPA negotiations with Eastern African Community) Pacific (management of the interim EPA) South Africa (management of the TDCA) 44
45 Market Access Regulation (Council Regulation (EC) No 1528/2007) MAR =a temporary unilateral scheme before the conclusion and application of the Economic Partnership Agreements. It contains a Protocol on rules of origin in its Annex II. It provides for derogations allowing preferential treatment to be granted to products which do not strictly satisfy the criteria for "originating products which are granted to a number of iepa States in particular for fisheries products (e.g. for Mauritius, Seychelles, Mauritius) 45
46 Overseas Countries and Territories (OCT Council Decision 2013/755/EU) OCTs are territories, not part of the EU territory, which are constitutionally linked to four EU Member States (Denmark, France, the Netherlands and the United Kingdom). The OCT Decision contains a Protocol on rules of origin in its Annex VI. It provides for derogations allowing preferential treatment to be granted to products which do not strictly satisfy the criteria for "originating products which are granted to a number of OCTs including for fisheries products (e.g. for Greenland and Saint-Pierre and Miquelon and the Falklands) 46
47 Free Trade Agreements Concluded and entered into application (EU - Mexico Economic Partnership, Political Co-ordination and Cooperation Agreement, 2000) Association Agreement between the EU and Chile, 2003) EU - Korea Free Trade Agreement EU Columbia Peru Free Trade Agreement (2012) EU Central America Association Agreement (2012) Concluded but not yet into force: EU Singapore FTA Under negotiation: Canada, USA, Mercosur, India, Malaysia, Vietnam, Japan 47
48 5. Binding Origin Information 48
49 BINDING ORIGIN INFORMATION A binding origin information (BOI) is a decision on the origin of a good issued to the applicant with respect to one type of goods and one set of circumstances conferring origin. Legal framework Article 12 of the Customs Code, Regulation (EC) No 2913/92 Articles 5-14 of the Customs Code Implementing Provisions, Regulation (EC) No 2954/93 49
50 BOI decision issued upon written application BOI for import or export operations, either preferential or non-preferential origin (note: a BOI does not exempt the holder from providing a proof of origin!) A BOI is issued by a national customs authority and is legally binding on all Member States customs authorities Time limit for taking a BOI decision within 150 days Period of validity 3 years 50
51 BOI decision takes effect from the start date of validity specified in the decision BOI decision relates to only 1 type of goods and 1 set of circumstances conferring origin BOI decision can cease to be valid in circumstances other than its expiry Granting a period of extended use is possible under certain conditions Information is available on : ndex_en.htm 51
52 52 Thank you very much for your attention!!!
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