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Customs news: Prepare for important changes

As we have informed you in the past, some countries within the EUROMED region (Europe and the Mediterranean region), which allow each other zero-duty trade on the basis of preferential origin, are adopting more modern rules of origin, referred to as “transitional”, from September 2021. The EUROMED region’s preferential rules of origin are historically based on the PEM Convention. The transitional rules of origin are more lenient for most types of goods. They are currently applied by around 20 countries, and more countries intend to adopt them in the future.

EU producers and exporters may follow these transitional rules of origin or the previous rules of origin under the PEM Convention in relation to exports of goods to countries that have adopted the transitional rules of origin. Both sets of rules currently exist in parallel.

Until recently, customs authorities required that an explicit reference to the transitional rules be made in the supplier’s declarations certifying the preferential origin of goods within the EU; otherwise, the materials purchased had to be considered as originating only under the rules of the PEM Convention. As the transitional rules of origin are more lenient for most types of goods, this condition was not factually substantiated.

This left the manufacturers making the calculations of preferential origin in the difficult position of ensuring the correct wording on all the supplier’s declarations received. If part of the supplier’s declarations could only be considered valid under the PEM rules (because, for example, they did not refer to a specific type of rules of origin, as was common in the past) and another part of the supplier’s declarations referred only to the transitional rules, manufacturers could not universally use these declarations for calculating origin under the PEM Convention or, conversely, under the transitional rules.

A recent amendment to the Implementing Act of the Union Customs Code (Commission Implementing Regulation (EU) 2015/2447) has relaxed the requirements for the wording of the supplier’s declarations for the use of the transitional rules of origin.

What are the new conditions in relation to the supplier’s declarations?

According to the amendment of the Implemented Act, if the supplier’s declarations do not contain a reference to a specific type of rules of origin, the products supplied are deemed to comply with the rules of origin under both the PEM Convention and the transitional rules. Exceptions include certain agricultural products (namely tariff chapters 2, 4-15, 16 (except for processed products of sea-fishing) and chapters 17-24, for which the transitional rules may, on the contrary, be stricter. This simplification also does not apply when the supplier’s declaration is made using cumulation with a EUROMED country which has not yet acceded to the transitional rules.

Should the products in question meet only the more lenient transitional rules of origin, the supplier is still obliged to indicate this fact in the supplier’s declaration by expressly mentioning the “transitional rules”.

These new provisions of the Implementing Act will apply retroactively from 1 September 2021, which may also help many EU producers and exporters in any potential subsequent inspections.

New obligation to indicate the binding information number in the customs declaration

If you have obtained binding tariff information (or, less frequently, binding origin information), you must now indicate this fact in the customs declaration when importing or exporting goods to which this binding information relates, using the reference number of the decision. This also applies if the customs declaration is lodged by your customs representative. We recommend that you actively communicate with your customs representative about this obligation.

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