UK-EU Trade and Cooperation Agreement - Origin

 

Declaration of originating status.

Under the UK-EU TCA agreement agreed on 23 December 2020, products originating in “the Other Party” can benefit from duty free access on import (Article ORIG.3). The preferential rules of origin are set out in ANNEX ORIG-2 (Product Specific Rules of Origin) and Notes at ANNEX ORIG-1.

 

Proof of Origin

Article ORIG.18

  1. The importing Party, on importation, shall grant preferential tariff treatment to a product originating in the other Party within the meaning of this Chapter on the basis of a claim by the importer for preferential tariff treatment. The importer shall be responsible for the correctness of the claim for preferential tariff treatment and for compliance with the requirements provided for in this Chapter.
  2. A claim for preferential tariff treatment shall be based on:

(a) a statement on origin that the product is originating made out by the exporter; or

(b) the importer’s knowledge that the product is originating.

 

Importer’s knowledge is further elaborated in Article ORIG.21:

Article ORIG.21

  1. For the purposes of a claim for preferential tariff treatment that is made under point (b) of Article ORIG.18(2) [Claim for preferential tariff treatment], the importer’s knowledge that a product is originating in the exporting Party shall be based on information demonstrating that the product is originating and satisfies the requirements provided for in this Chapter.

4 Eyes Ltd believes that the use of the word “knowledge” is deliberate and must mean something much more than “belief” or “opinion”. In other words, the importer must be absolutely certain, and able to demonstrate at need that the origin of the goods is as described in order to rely on importer’s knowledge. Therefore, most importers will rely on a “statement of origin” from their suppliers. This is covered in Article ORIG.19:

 

Article ORIG.19

  1. A statement on origin shall be made out by an exporter of a product on the basis of information demonstrating that the product is originating, including information on the originating status of materials used in the production of the product. The exporter shall be responsible for the correctness of the statement on origin and the information provided.
  2. . . .
  3. A statement on origin shall be valid for 12 months from the date it was made out or for such longer period as provided by the Party of import up to a maximum of 24 months.
  4. A statement on origin may apply to:

(a) a single shipment of one or more products imported into a Party; or

(b) multiple shipments of identical products imported into a Party within the period specified in the statement on origin, which shall not exceed 12 months.

 

It is clear from this Article that the exporter, if providing a “statement of origin” needs to obtain “suppliers declarations” from his suppliers before providing such a statement, unless he is the original producer of “wholly obtained” products.

A wine seller, for example, if selling wine manufactured by a third party, will need to get his suppliers to complete “Long Term” Supplier’s Declarations (LTSD) for each product which they produce, or a statement for each shipment. See ANNEX ORIG-3 especially Appendix 2 thereto, in this form:

 

LONG-TERM SUPPLIER’S DECLARATION

 

I, the undersigned, the supplier of the products covered by the annexed document, which are regularly supplied to( …………………………., declare that:

  1. The following materials which do not originate in [indicate the name of the relevant Party] have been used in [indicate the name of the relevant Party] to produce these products:

 

Description of the products supplied

Description of non-originating materials used

HS heading of non-originating materials used

Value of non-originating materials used

 

 

 

 

 

 

 

 

 

 

 

 

Total value

 

 

  1. All the other materials used in [indicate the name of the relevant Party] to produce those products originate in [indicate the name of the relevant Party]

 

This declaration is valid for all subsequent consignments of these products dispatched

from ....................................................................................................................... to .......................................................................................................................

I undertake to inform ...................................................................................................................... immediately if this declaration ceases to be valid.

…………………………………………………………………………………………………………………… (Place and Date)

………………………………………………………… (Name and position of the undersigned, name and address of company) ………………………………………………………………………………………………………………………… (Signature)

 

 

Post-Brexit Review of the Origin Rules

Article ORIG.17

“Not earlier than 2 years from the entry into force of this Agreement, at the request of either Party, the Trade Specialised Committee on Customs Cooperation and Rules of Origin shall review the Parties’ respective duty drawback and inward-processing schemes. . . . In the light of this review, the Trade Specialised Committee on Customs Cooperation and Rules of Origin may make recommendations to the Partnership Council for the amendment of the provisions of this Chapter and its Annexes, with a view to introducing limitations or restrictions with respect to drawback of or exemption from customs duties.

 

In our opinion this review clause potentially means that in 2023 or later, the Committee established under the Agreement could recommend radical changes to the operation of the origin rules if these are deemed disadvantageous “with respect to drawback of or exemption from customs duties”. We don’t think this has been widely recognised.

 

 

 

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