Rules of origin for lower customs duties

Rules of origin are an intrinsic component of any free-trade zone. They define the "economic nationality" of products. There are two types: non-preferential rules of origin and preferential rules of origin.

Two types of rules

• Non-preferential rules of origin apply to all trade policy measures in general. A product that is not the subject of a free trade agreement between two or more economic players is subject to non-preferential rules of origin.

• Preferential rules of origin apply to certain goods from certain countries which have met certain criteria enabling them to claim preferential tariffs. When signing free-trade agreements, partner countries or territories can grant each other reductions on these tariffs (tariff preferences). Goods do not always have a preferential origin. When they do, it originates from the EU or a partner country.

Generally speaking, a product will always retain its origin if sufficient working or processing has been carried out in its country of origin. To determine this, we need to refer to the protocol of origin, included in each agreement, which sets out these rules and varies from one free trade agreement to another. The same product's advantage from a preferential origin can differ based on the export country and its regulations.

Goods can be distinguished as follows:

• A product obtained entirely in the country of origin: unprocessed products such as fruit and vegetables, live animals born and raised in a given country, plants harvested in a given country or minerals mined in just one country.
• A product that has undergone sufficient working or processing in the country of origin: a product is considered to have had substantial working or processing when it is classified in a heading or subheading (depending on the applicable rule) different from all the non-originating materials used.
• Insufficient working or processing: certain types of working or processing are by definition considered insufficient to give the product its "originating" nature.

In short, there can be various origins, which makes it easier to obtain a preferential origin. In this case, proving that the goods have undergone sufficient working or processing is not necessary in order to obtain a preferential origin. The acquisition of the preferential rate through the application of cumulation rules is always linked and limited to the free trade agreements in question and their contracting parties.

How can you check the applicable rule of origin?

To help companies, the European Commission has developed a Rules of Origin Self-Assessment tool called ROSA. It provides you with:

• The possibility to determine the origin of your product in just a few clicks
• Detailed information on how to properly document the origin of your product under each agreement
• Explanations of rules of origin requirements and conditions
• Practical examples
• Access to legal texts
• An overview of rules of origin procedures

What documents are required to prove preferential origin?

If the value of your product is less than €6,000, as an exporter you can issue a preferential declaration of origin. However, the importer in the destination country may request this declaration to avoid customs duties.

If the value of your product exceeds €6,000, you should first register with the EU's Registered Exporters System ("REX system") and provide a declaration of origin. The REX number assigned to you should be included in this declaration.