EU Rules of Origin: Base principles and recent developments ECCO - - PowerPoint PPT Presentation

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EU Rules of Origin: Base principles and recent developments ECCO - - PowerPoint PPT Presentation

Apr 30, 2023 132 likes •513 views

External Trade EU Rules of Origin: Base principles and recent developments ECCO Symposium 7 September 2011 Mara Isabel Garca Cataln TRADE G3 External Trade First Part: The basics of the rules rules of of origin origin

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SLIDE 1

External Trade

María Isabel García Catalán TRADE G3

EU Rules of Origin:

Base principles and recent developments

ECCO Symposium 7 September 2011

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SLIDE 2

External Trade

  • First Part: The basics of the

First Part: The basics of the rules rules of

  • f origin
  • rigin
  • 1. Introduction: why do we need rules of origin?
  • 2. Methods to determine the origin of goods
  • 3. Other rules (duty drawbacks, cumulation)
  • Second Part: State of

Second Part: State of play play of the EU

  • f the EU RoO

RoO

  • 1. Panorama of EU preferences
  • 2. Panorama of the new EU rules of origin

First wave: Cotonou Second wave: Korea, Central America, Peru and Colombia Third wave: The reform (GSP)

  • 3. Panorama of Cumulation
  • Third

Third Part: Part: Rules Rules of

  • f origin
  • rigin in future

in future FTAs

  • FTAs. The CETA negotiations
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External Trade

Part I The basics of the EU The basics of the EU preferential preferential RoO RoO

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SLIDE 4

External Trade

(I) 1. Introduction: why do we need preferential rules of origin?

Because we need to link a product with a country in order to grant to that product a preferential tariff treatment

EU Korea China

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SLIDE 5

External Trade

(I) 1. Introduction: why do we need rules of

  • rigin?

Because we need to link a product with a country in order to grant to that product a preferential tariff treatment

EU

?

Korea China

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SLIDE 6

External Trade

(I) 1. Introduction: why do we need rules of

  • rigin?

Because we need to link a product with a country in order to grant to that product a preferential tariff treatment

EU Korea China

?

RoO are the instruments that permit to link a product with a country, the instruments that help us to consider a product as sufficiently linked to a country as to receive a preferential tariff treatment

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SLIDE 7

External Trade (I) 2. Methods to determine the origin

How to express that a product has been sufficiently sufficiently transformed transformed?

  • 1. Value added: local content acquired

in the country of the preference

  • 2. Specific operations

I.e., Diffusion for integrated circuits

  • 3. Change of tariff classification
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SLIDE 8

External Trade (I) 2. Methods to determine the origin

  • Rule: Value added

Rule: Value added

  • Example:

70% VA 100.000€

EC Country C Country B

Country A 50.000 €

30% maximun non-originating materials Ex work price Customs value

  • f the imported material

when importing in the beneficiary All costs Benefit 25.000 € 20.000 €

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SLIDE 9

External Trade (I) 2. Methods to determine origin

Rule: Specific operations. Rule: Specific operations. Example:

Diffusion

EC Country B

Country A

Operation in which integrated circuits are formed on a semiconductor substrate by the selective introduction of an appropriate dopant

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SLIDE 10

External Trade (I) 2. Methods to determine origin

  • Rule: Change of tariff heading

Rule: Change of tariff heading

  • Example:

EC Country B

Country A

8401 10

Manufacture from materials

  • f any heading except

that of the product

8401 40

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SLIDE 11

External Trade

(I) 3. Other rules

Prohibition of Duty Drawback Prohibition of Duty Drawback

Non-originating materials used in the manufacture of products shall not be subject to the exemption of customs duties, remission, refund, non-payment partial or complete. The exporter needs to be prepared to submit all appropriate documents proving that no drawbacks have been obtained .

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SLIDE 12

External Trade

(I) 3. Other rules

  • Prohibition of Drawbacks

Beneficiary Country X EU

No duties

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SLIDE 13

External Trade

(I) 3. Other rules

Proofs of origin Proofs of origin Two types of proofs: Two types of proofs:

  • Issued by the customs authorities of the

exporting country: certificates EUR 1, EUR MED or FORM A

  • Made out by the exporter/producer:

invoice declarations

GSP Meds The rest

For consignments up to 6000 Euros (all exporters) For consignments beyond 6000 Euros (only approved exporters)

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SLIDE 14

External Trade

  • 3. Cumulation possibilities
  • Rule: Value added
  • Example:

70% VA 60%

  • 100.000

55.000 40.000

EC Country C Country B

Country A

+ +

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SLIDE 15

External Trade

  • 3. Cumulation possibilities

Diagonal Cumulation

  • Rule: Value added
  • Example:

70% VA

EC Country B

Third Country

Country A

Country A considers the whole whole value value of the materials

  • riginating in B

as its owns

RoO VA 50% VA: 20000 Final value: 40.000 VA: 55.000 Final value: 100.000

The non-originating material is further processed and become become originating

  • riginating in B

in B

+ +

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External Trade

  • 3. Cumulation possibilities

Diagonal Cumulation

  • Rule: Value added
  • Example:

70% VA 60%

EC Country B

Third Country

Country A

Country A cannot cannot consider the material processed in B as its owns

VA: 15.000 Final value: 40.000 RoO VA 50% VA: 55.000 Final value: 100.000

The non-originating material is further processed but not not enough as to consider it as

  • riginating
  • riginating in B

in B

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SLIDE 17

External Trade

  • 3. Cumulation possibilities

Full Cumulation

  • Rule: Value added
  • Example:

70% VA

EC Country B

Third Country

Country A

Country A can can consider the value value added added in B as its owns

RoO VA 50% VA: 55.000 Final value: 100.000 VA: 15.000 Final value: 40.000

+ +

The non-originating material is further processed but not enough as to consider it as

  • riginating
  • riginating in B

in B

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SLIDE 18

External Trade

Part II State of State of play play of the EU

  • f the EU RoO

RoO

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External Trade

(II) 1. General panorama of EU preferences

Other EPAs Ukraine EU GSP countries XS XK MOL MAR/OCTs (ACPs initialled EPAs Pan-Euro-Med Balkans Mexico Chile Korea CA

MERCOSUR Canada

Autonomous Preferences Reciprocal Preferences CAN South Africa

SNG

PNG CARIFORUM India ATMs ATPs XK MOL Lybia

MLS

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SLIDE 20

External Trade

(II) 2. Panorama of EU rules of origin

Other EPAs Ukraine EU GSP countries XS XK MOL MAR/OCTs (ACPs initialled EPAs Pan-Euro-Med Balkans Mexico Chile Korea CA

MERCOSUR Canada

Autonomous Preferences Reciprocal Preferences CAN South Africa

SNG

PNG CARIFORUM India ATMs ATPs XK MOL Lybia

MLS

Old standard RoO

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External Trade

(II) 2. Panorama of EU rules of origin Old standard

EC Country B

Country A

8401 10

  • Change of tariff classification and

and

  • 40

40 % maximun non-originating materials

8401 40

Country C

7304 40.000€ 100.000€

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SLIDE 22

External Trade

(II) 2. Panorama of EU rules of origin Old standard

EC Country B

Country A

8401 10

  • Change of tariff classification and

and

  • 40

40 % maximun non-originating materials

8401 40

Country C

7304 40.000€ 100.000€

30

30.000€

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SLIDE 23

External Trade

Other EPAs Ukraine EU GSP countries XS XK MOL MAR/OCTs (ACPs initialled EPAs Pan-Euro-Med Balkans Mexico Chile Korea CA

MERCOSUR Canada

Autonomous Preferences Reciprocal Preferences CAN South Africa

SNG

PNG CARIFORUM India ATMs ATPs XK MOL Lybia

MLS

Old standard RoO with deep focused relaxation: Cotonou +; This relaxation does not affect chapter 84

(II) 2. Panorama of EU rules of origin

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SLIDE 24

External Trade

Other EPAs Ukraine EU GSP countries XS XK MOL MAR/OCTs (ACPs initialled EPAs Pan-Euro-Med Balkans Mexico Chile Korea CA

MERCOSUR Canada

Autonomous Preferences Reciprocal Preferences CAN South Africa

SNG

PNG CARIFORUM India ATMs ATPs XK MOL Lybia

MLS

Old standard RoO with some relaxation, not focused This relaxation affect chapter 84 in Korea and Colombia-Peru

(II) 2. Panorama of EU rules of origin

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External Trade (II) 2. Panorama of EU rules of origin Korea

EC Country B

Country A

8401 10

  • Change of tariff classification

and

  • 40 % maximun non-originating materials

8401 40

Country C

7304 40000€ 100.000€

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External Trade (II) 2. Panorama of EU rules of origin Korea

EC Country B

Country A

8401 10 8401 40

Country C

7304 100.000€ 30000€

  • 30

30 % maximun non-originating materials 45

45000€

No No certificates certificates issued issued by customs by customs Only invoice declaration by approved exporters No prohibition of DDB (though with a type

  • f safeguard)
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SLIDE 27

External Trade (II) 2. Panorama of EU rules of origin Colombia-Peru

EC Country B

Country A

8401 10

  • Change of tariff classification

and

  • 40 % maximun non-originating materials

8401 40

Country C

7304 40000€ 100.000€

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SLIDE 28

External Trade (II) 2. Panorama of EU rules of origin Colombia-Peru

EC Country B

Country A

8401 10 8401 40

Country C

7304 100.000€ 30000€

  • 30

30 % maximun non-originating materials 60

45000€

Certificates Certificates issued issued by customs by customs No prohibition of DDB (though with a type

  • f safeguard)

60000€

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SLIDE 29

External Trade

(II) 2. Panorama of EU rules of origin

Other EPAs Ukraine EU GSP countries XS XK MOL MAR/OCTs (ACPs initialled EPAs Pan-Euro-Med Balkans Mexico Chile Korea CA

MERCOSUR Canada

Autonomous Preferences Reciprocal Preferences CAN South Africa

SNG

PNG CARIFORUM India ATMs ATPs XK MOL Lybia

MLS

The most generalised relaxation: the reform This relaxation affects chapter 84

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External Trade (II) 2. Panorama of EU rules of origin The reform (GSP)

EC Country B

Country A

8401 10

  • Change of tariff classification

and

  • 40 % maximun non-originating materials

8401 40

Country C

7304 40000€ 100.000€

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SLIDE 31

External Trade (II) 2. Panorama of EU rules of origin The reform (GSP)

EC Country B

Country A

8401 10 8401 40

Country C

7304 100.000€ 30000€

  • 30

30 % maximun non-originating materials 70

45000€ 60000€ 70000€

No No certificates certificates issued issued by customs by customs Only origin declaration by registered exporters No prohibition of DDB (though with a type

  • f safeguard)
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SLIDE 32

External Trade

(II) 2. Panorama of EU rules of origin Cumulation

  • Other EPAs

Ukraine EU GSP countries XS XK MOL MAR/OCTs (ACPs initialled EPAs Pan-Euro-Med Balkans Mexico Chile Korea CA

MERCOSUR Canada

Autonomous Preferences Reciprocal Preferences CAN South Africa

SNG

ASEAN SAARC CA-CAN PNG CARIFORUM India ATMs ATPs XK MOL Lybia

MLS

MRCS

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External Trade

Part III

Rules Rules of

  • f origin
  • rigin in future

in future FTAs FTAs: : The CETA The CETA negotiations negotiations

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SLIDE 34

External Trade (III). Rules of origin in future FTAs: The CETA negotiations

EC Country B

Country A

8401 10

  • Change of tariff classification

and

  • 40 % maximun non-originating materials

8401 40

Country C

7304 50.000€ 100.000€

  • Change of tariff heading

with a tolerance to use materials

  • f the same heading up to 50%

no limits

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SLIDE 35

External Trade (III) Rules of origin in future FTAs: Other FTAs

EC Country B

Country A

8401 10

  • Change of tariff classification

8401 40

Country C

7304

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External Trade (III) Rules of origin in future FTAs: Other FTAs

EC Country B

Country A

8401 10 8401 40

Country C

7304 100.000€ ???€

  • 30

30 % maximun non-originating materials ?

No No certificates certificates issued issued by customs by customs Only origin declaration by approved exporters Prohibition of DDB?