Information for Traders on Preferential Imports/Exports

Introduction
Rules of Origin
Cumulation
Practical examples demonstrating the application of Pan European Cumulation
Documentation
Simplified Procedure for the issue of origin documentation
Supplier’s declarations
Turkey
A.C.P. Countries
List of offices where blank certificates can be obtained
Further information

Introduction

The European Union has concluded trade arrangements with certain non-EU countries that allow exports from the EU to enter the markets of these countries at a reduced or nil rate of duty. They also allow imports from these countries into the EU at a reduced or nil rate of duty. These arrangements are known as Preferential Trade Agreements and the duties involved are referred to as preferential rates of duty.

Countries with which the EU has signed Preferential Trade Arrangements are as follows;

Albania
Algeria
Bosnia-Herzegovina
Canary Islands
Ceuta
Chile
Croatia
Egypt
Faroe Islands
Iceland
Israel
Jordan
Lebanon
Liechtenstein
Macedonia (FYR)
Melilla
Mexico
Morocco
Norway
Montenegro
Serbia
South Africa
Switzerland
Syria
Territories of the West Bank and Gaza Strip
Tunisia
Turkey (Chap 1-24, 26, 27, 45, 53 72 & 73).

In order to qualify for preferential rates of duty, goods must meet the following conditions:

They must be eligible for preference under the agreements. Imported raw materials or components used must be sufficiently worked or processed. They must be subject to a minimal level of processing. The criteria that must be satisfied are referred to as rules of origin (see Rules of Origin).
They must be accompanied by documentary evidence of origin such as a Movement Certificate EUR.1 or an ATR certificate in the case of Turkey (see Documentation).
See the list of offices where blank certificates can be obtained.
They must normally be transported directly from the export to the import market.

Rules of origin

Preferential Rules of Origin are concerned with determining the nationality of goods. All Preferential Trade Agreements concluded by the EU with third countries specify criteria that must be satisfied so that processed or manufactured products are eligible for preferential treatment.

These criteria are commonly known as 'preferential rules of origin'. When a product is manufactured in accordance with the relevant rule of origin it becomes an "originating product" and thus becomes eligible for preferential treatment on import or export. Unless products become "originating products" they cannot benefit from preferential treatment.

Exporters should be aware of the distinction between originating and non-originating materials. Originating materials are those that have been produced in accordance with preferential rules of origin. Non-originating materials have not been produced in accordance with these rules. Both types of materials may be used in the manufacture of products for export, however, preferential rules of origin are only applicable to the non-originating materials. Once sufficient processing has been carried out on these materials the resultant product becomes an "originating product" and is then eligible for preferential treatment when exported.

1. How to apply rules of origin

In summary, products obtain originating status by:

being wholly obtained in the EU or relevant third country (i.e. most agricultural products)
having undergone sufficient working or processing beyond insufficient operations in either the EU or the relevant third country.

Many goods contain raw materials or components, which are imported from third countries not party to a trade agreement with the EU. Such materials and components can also be purchased within the territories of agreement countries and within the EU.

The various trade agreements provide rules of origin that enable such materials and components when incorporated into finished products to become originating products. The rules are based on the principle that materials imported into an agreement country are regarded as originating there, provided sufficient working or processing has taken place.

2. Examples of Rules of Origin

Value Added Method
It is necessary in this case for the value added as a result of the working or processing to constitute a certain percentage of the value of the finished product. Or alternatively for the value of the imported materials not to exceed a particular percentage of the factory (ex-works) price of the finished product. e.g.

HS heading No. [1]	Description of product [2]	Working or processing carried out on non-originating materials that confers originating status [3]
3813	Preparations and charges for fire-extinguishers; charged fire-extinguishing grenades	Manufacture in which the value of all the materials used does not exceed 50% of the ex-works price of the product

Manufacturing Process Method Rule
Finished products are considered to be sufficiently worked or processed when particular specific working or processing activities are carried out. e.g.

HS heading No. [1]	Description of product [2]	Working or processing carried out on non-originating materials that confers originating status [3]
Chapter 60	Knitted or crocheted fabrics	Manufacture from: - natural fibres, - man-made staple fibres not carded or combed or otherwise processed for spinning, or - chemical materials or textile pulp

Change of Tariff Heading Method
Finished products are considered to be sufficiently worked or processed when the imported raw materials are classified within a tariff heading that is different from that of the finished product. e.g.

HS heading No. [1]	Description of product [2]	Working or processing carried out on non-originating materials that confers originating status [3] or (4)
ex Chapter 40	Rubber and articles thereof; except for:	Manufacture in which all the materials used are classified within a heading other than that of the product

Combination of Two or More Above Methods

HS heading No. [1]	Description of product [2]	Working or processing carried out on non-originating materials that confers originating status [3] or (4)
ex 3916 and ex 3917	Profile shapes and tubes	Manufacture in which: - the value of all the materials used does not exceed 50% of the ex-works price of the product; - the value of any materials classified within the same heading as the product does not exceed 20% of the ex-works price of the product	Manufacture in which the value of all the materials used does not exceed 25% of the ex-works price of the product

The exporter has a choice of option c. or d..

The rules of origin outlined above are applicable to countries within the Pan-Euro-Mediterranean zone. The countries of the Pan-Euro-Med Zone include,

Algeria,
Egypt,
Faroe Islands,
Iceland,
Israel,
Jordan,
Lebanon,
Liechtenstein,
Norway,
Morocco,
Palestinian Authority of the West Bank and Gaza Strip,
Switzerland,
Syria,
Tunisia,
and Turkey.

3. Where can I find the origin rules?

Details of the origin rules can be found in the individual EU’s preferential trade agreements, and also on the : Commission website.

4. Insufficient working or processing

The following operations shall be considered as insufficient working or processing to confer the status of originating products:

preserving operations to ensure that the products remain in good condition during transport and storage
breaking up and assembly of packages
washing, cleaning; removal of dust, oxide, oil, paint or other coverings
ironing or pressing of textiles
simple painting and polishing operations
husking, partial or total bleaching, polishing, and glazing of cereals and rice
operations to colour sugar or form sugar lumps
peeling, stoning and shelling of fruit, nuts and vegetables
sharpening, simple grinding or simple cutting
sifting, screening, sorting, classifying, grading, matching (including the making-up of sets of articles)
simple placing in bottles, cans, flasks,bags,cases, boxes, fixing on cards or boards and all other simple packaging operations
affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging
simple mixing of products, whether or not of different kinds
simple assembly of parts of articles to constitute a complete article or disassembly of products into parts
a combination of two or more operations specified in (a) to (n)
slaughter of animals.

Cumulation

Cumulation is a concept used in preferential trade agreements, which essentially widens the definition of originating products. There are basically three types of cumulation, bi-lateral, diagonal and full cumulation.

1. Bi-lateral Cumulation

This type of cumulation as the name implies is between two countries. For instance, the EU-Israel agreement contains a bi-lateral cumulation provision. This enables originating materials imported from Israel to be regarded as originating when incorporated into a finished product in the EU. Bi-lateral cumulation makes this possible even though the materials do not originate in the EU. The provisions are designed to encourage greater trade in originating products between the two partner countries. Cumulation in this instance makes it easier for traders to satisfy origin rules. It is not necessary for the Israeli materials to undergo the normal working or processing when incorporated into a product in the EU. Likewise EU products exported to Israel are not required to undergo normal working or processing there to obtain originating status.

2. Diagonal or Pan-Euro-Mediterranean Cumulation

Pan-Euro-Med cumulation is of greater interest and affords more opportunities to exporters in meeting preferential origin rules. The Pan Euro-Mediterranean cumulation zone comprises of the EU and the following countries:
Non European Union States included in the Pan Euro-Mediterranean cumulation zone:-

Algeria
Jordan
Palestinian Authority of the West Bank and Gaza Strip
Egypt
Lebanon
Switzerland
Faroe Islands
Liechtenstein
Syria
Iceland
Morocco
Tunisia
Israel
Norway
Turkey.

All the EU agreements with these countries are linked by means of cumulation provisions, enabling products originating in all these countries and imported into the EU to be simultaneously considered as originating when incorporated into products. (Likewise EU originating products exported to these countries are also considered originating when incorporated in products). The cumulation in this instance is known as diagonal cumulation as it involves a number of countries.

For example, an EU trader wishes to export goods to Algeria and imports raw materials originating in Egypt, Liechtenstein and Norway. These materials are considered as originating when used in manufacturing a product as a result of diagonal cumulation. If this provision did not exist such materials would be non-originating and would make it more difficult to satisfy origin rules.

In general the origin of the final product will be determined through the "last working or processing" carried out provided that the operations carried out are more than minimal.
If, in the manufacture of a product, the originating materials are not subject to working or processing going beyond minimal operations in the country of manufacture, the origin shall be determined by the highest value added in the country of manufacture. To determine which country has added the highest value, the value added in the country of manufacture has to be compared with the values of the materials used originating in the other countries.

If no working or processing is carried out, the materials or products simply retain their origin if they are exported to one of the countries concerned.

It is important to note that in order for all countries involved in the Pan-Euro-Med-Zone to avail of cumulation, all agreements must be in place not only between the EU and these countries but also between the countries themselves.

3. Full Cumulation

Full cumulation allows the parties to an agreement to carry out working or processing on non-originating products in the area formed by them. Full cumulation means that all operations carried out in the participating countries are taken into account. While other forms of cumulation require that the goods be originating before being exported from one party to another for further working or processing, this is not the case with full cumulation. Full cumulation simply demands that all the working or processing in the list rules must be carried out on non-originating materials in order for the final product to obtain origin. Full cumulation is in operation between the Community and e.g. the countries of the EEA, Maghreb, Overseas Countries and Territories or the African Carribbean Pacific countries.

Practical examples demonstrating the application of Pan Euro-Mediterranean Cumulation

Last working or processing carried out.
Fabrics (HS 5112; obtained from lambs’ wool not combed of carded) originating in the Community are imported into Morocco; lining, made of man-made staple fibre (HS 5513) is originating in Tunisia.

In Morocco, suits (HS 6203) are made up.

The last working or processing is carried out in Morocco; the working or processing (in this case, making-up the suits) goes beyond minimal therefore, the suits obtain Moroccan origin.

If the last working or processing does not go beyond minimal operations, recourse has to be taken to the highest value of the materials used in the manufacture.

The different parts of a suit, originating in two countries, are packed in Algeria. The trousers originating in Iceland have a value of 180 euros; the jacket, originating in the Community, has a value of €100. The minimal operation, carried out in Algeria ("packing") costs €2. The ex-works price of the final product is €330.

To decide the origin, the value added in Algeria has to be compared with the customs values of the other materials used:

Value added in Algeria (which includes €2 Euros for the operation) =
€330 (ex-works price) - €280 ( trousers €180 + jacket €100) = €50, is the Algerian 'added value'.

The Icelandic value (€180) is greater than the value added in Algeria and the values of all other materials used. Therefore, the final product will have Icelandic origin.

Products that are exported without undergoing further working or processing.
A carpet, originating in the Community, is exported to Morocco and is, without undergoing further operations, imported into Egypt after 2 years. The carpet does not change origin and has still Community origin upon importation into Egypt.

Documentation

Products originating in a third country with which the EU has a preference agreement can on importation into the EU benefit from a preferential rate of duty upon submission of either: -

a 'movement certificate EUR.1/movement certificate EUR-MED': or
an 'invoice declaration or invoice declaration EUR-MED' (the declaration can appear on an invoice, a delivery note or commercial document).

Likewise products originating in the Community can on exportation to such a third country benefit from a preferential rate of duty on submission of either of these documents.
Exporters are obliged to keep records and produce them if requested to do so by Customs to demonstrate that the goods are of EU origin. These records should include:

details of the process of manufacture,
supporting invoices and accounts, and
a suppliers declaration stating the origin of any goods supplied to the exporter.

It is important to remember that all supporting documentation in relation to preferential exports must be retained by the exporter for a period of three years.

1. Procedure for issue of EUR.1/EUR-MED certificates

An exporter must make an application in writing indicating that he/she wishes to have a Movement Certificate EUR.1/EUR-MED issued by the Irish customs.

The EUR.1/EUR-MED is composed of a movement certificate (pages 1 and 2) and an application form (pages 3 & 4). In addition to the exporter the application form can be completed by his authorised representative.

If the application is hand-written, it must be completed in ink in printed characters. The description of the products must be given in the box reserved for this purpose without leaving any blank lines. Where the box is not completely filled, a horizontal line must be drawn below the last line of the description, the empty space being crossed through.

All appropriate documents proving the originating status of the products concerned can be requested at any time by the certifying officer. The certificate is issued when the certifying officer is satisfied that the products originate in the Community or the relevant third country. The certifying officer should ensure that the EUR.1/EUR-MED is completed and in particular, check whether the space reserved for the description of the products has been completed.

2. Completion of EUR.1 Certificates

Box 1 Insert the name and address of the exporting company.
Box 2 Insert appropriate country or groups of countries or territories
Box 3 Insert name of consignee (optional).
Box 4 Insert country of origin.
Box 5 Insert country or territory of destination.
Box 6 Insert transport details (optional).
Box 7 This box is normally left blank unless the Certificate is a duplicate (where the original had been lost), a replacement certificate or issued retrospectively (where the goods have left the country before the EUR.1 was issued). In these instances Box 7 should be endorsed "Duplicate", "Replacement of movement certificate issued in" or "Issued Retrospectively".
Box 8 A full and detailed description of the goods should be entered. A horizontal line should be drawn under the final item in this box and rule through the unused space.
Box 9 Quantities should be given in metric measure.
Box 10 Whenever possible, the number(s), if any, and date(s) of the invoice(s) relating to the goods and produced with the movement certificate EUR.1 should be stated.
Box 11 This must be endorsed by Customs
Box 12 Declaration by the exporter. Only the exporter can sign this declaration. An original signature is required.

A proof of origin shall be valid for four months from the date of issue in the exporting country and must be presented to the customs authorities in the importing country within this time frame.

Movement certificate EUR-MED is completed in the same way as the EUR1 form except for box 7 where cumulation or non-cumulation is declared.

Simplified procedure for the issue of origin documentation

If you are claiming preferential treatment for exports it is worth noting that there is a simpler option available, which dispenses with the need to use an EUR.1. It is not necessary to use an EUR.1 form if the goods being exported have a value of less than €6000. Instead, an invoice declaration is acceptable, the wording for which is set down in Invoice Declarations (PDF, 48KB).

If the value of the goods being exported exceeds €6000, you may also use the invoice declaration option provided you have got prior approval from Revenue (Customs Division).

You may obtain this approval by completing an application form giving details of the products you intend to export. The Application for Approval to use the Simplified Procedure for the Issue of Origin Documentation (PDF, 45KB) can be downloaded from the Revenue website. On receipt of the completed application a Customs official will visit your premises to examine the origin criteria involved. If you are approved you will receive an authorisation number which must be included on the endorsement on the invoice accompanying the goods or on other commercial documents.

As an approved exporter, you will have the following benefits:

you will not have to complete EUR1 certificates nor present them to customs for certification;
you may endorse your own export documentation to the effect that the goods qualify for EU origin status;
it will reduce delays and minimise your administrative costs;
you may receive exemption from signing the endorsement, which would be of particular benefit when issuing computer-generated invoices.

Supplier’s declarations

Suppliers must provide by means of a declaration, information concerning the status of products with regard to the Community’s preferential rules of origin. Supplier’s declarations must be used by exporters as evidence, in particular in support of applications for the issue of movement certificates EUR.1 or as a basis for making out invoice declarations.

A long-term suppliers declaration may be issued with retroactive effect. In such cases, its validity may not exceed the period of one year from the date on which it came into effect.

The supplier must inform the buyer immediately when the long-term suppliers declaration is no longer valid in relation to the goods supplied.

1. Making of supplier’s declarations

Except in the case of a long-term supplier’s declaration, the supplier must furnish a separate declaration for each consignment of goods.

The supplier must include that declaration on the commercial invoice for each consignment or on a delivery note or any other commercial document, which describes the goods concerned in sufficient detail to enable them to be identified. The supplier may furnish the declaration at any time, even after the goods have been delivered.

2. Long-term supplier’s declarations

When a supplier regularly supplies a particular customer with goods whose status in respect of the rules of preferential origin is expected to remain constant for a considerable period of time, he may provide a single declaration to cover subsequent shipments of those goods. This document is called a long-term supplier’s declaration. A long-term suppliers declaration may be issued for a period of up to one year from the date of issue of the declaration.

3. Format of and making out of suppliers declarations

For products having obtained preferential originating status, the suppliers declaration shall be given in the form prescribed in Supplier’s Declaration for Products having Preferential Origin Status, (PDF, 52KB) in that prescribed in Long-term declaration for products having preferential origin status (PDF, 32KB).

For products which have undergone working or processing in the Community without having obtained preferential originating status, the suppliers declaration shall be given in the form prescribed in Supplier’s declaration for products not having preferential origin status (PDF, 34KB) or, for long-term suppliers declaration, in that prescribed in Long-term supplier’s declaration for products not having preferential origin status (PDF, 35KB).

The supplier’s declaration must bear the original signature of the supplier in manuscript and may be made out on a pre-printed form. However, where the invoice and supplier’s declaration are drawn up by computer, the declaration need not be signed in manuscript provided that the supplier gives the client a written undertaking accepting complete responsibility for every suppliers declaration which identifies him as if it had been signed in manuscript by him.

4. Information Certificate INF4

To verify the accuracy or authenticity of a supplier’s declaration, the customs authorities may request the exporter to obtain from the supplier an information certificate INF4. Blank INF4 certificates may be obtained from one of Revenue's designated offices.

INF4 certificates are issued by the Customs Authorities of the Member State in which the supplier is established. The Customs authorities have the right to call for any evidence and to carry out any inspection of the suppliers accounts or any other check that they consider necessary.

The customs authorities must issue the information certificate INF4 within three months of receipt of the application submitted to them by the suppliers, indicating whether or not the declaration given by the supplier was correct.
The completed certificate is given to the supplier to forward to the exporter for presentation by him to the relevant customs authorities.

Turkey

Under the terms of the EU/Turkey trade agreement most industrial products, which are in free circulation in the EU, are also regarded as being in free circulation in Turkey, and vice-versa. Agricultural products of chapters 1-24, products of chapters 45 and 53 and ECSC products of Chapters 26, 27, 72 & 73 are excluded from the free circulation agreement and must be originating in order to qualify for preference.

1. What goods are considered to be in free circulation?

The following are considered to be in free circulation:

Imports from outside the Community or Turkey on which:
- all import formalities have been completed;
  and
- any customs duties or equivalent charges have been paid and not repaid in whole or in part.
Goods manufactured in the Community and or/Turkey wholly or partly from materials or parts originating outside the Community or Turkey, provided that:
- all import formalities for the materials or parts have been completed;
  and
- any customs duties or equivalent charges have been paid and not repaid in whole or in part.

2. What movement certificates are used in trade with Turkey?

Evidence of free circulation is provided by an A.TR form. Evidence of origin is provided by a certificate of origin form EUR.1.

3. Completion of A.TR Certificates

Box 1 Enter the full name and address of the person or company exporting the goods.
Box 2 Where appropriate enter the number of the transport document.
Box 3 Enter the name and address of the consignee.
Box 4 Already completed.
Box 5 Already completed.
Box 6 Already completed.
Box 7 Insert transport details (optional).
Box 8 Where the origin of the goods is required, the name of the country must be entered by the exporter in this box.
Box 9 Enter the number of the item(s) in question in relation to the total number of articles on the invoice.
Box 10 Enter the marks, numbers, quantity, kind of packages and the normal trade description of the goods.
Box 11 Enter the gross mass of goods, expressed in kilograms.
Box 12 This must be endorsed by Customs.
Box 13 Declaration by the exporter. Only the exporter can sign this declaration. An original signature is required.

4. What is the Simplified Procedure for ATRs?

There is an option available, where you may obtain prior approval from Revenue (Customs Division) to stamp your ATRs with a special metal stamp.

You may obtain this approval by completing an application form giving details of the products you intend to export. This application form can be down loaded from the Revenue website at:
Application for Approval to use the Simplified Procedure for the Issue of Origin Documentation (PDF, 45KB).

On receipt of the completed application a Customs official will visit your premises. If you are approved you will receive an authorisation number. You may then endorse your own ATR to the effect that the goods are in free circulation in the EU and this will reduce delays and administrative costs.

ACP Countries

The EC has been negotiating reciprocal Economic Partnership Agreements (EPAs) with six regional groups of African, Carribbean and Pacific (ACP) countries. Some ACP countries have not yet signed up to the EPAs. Those that have signed up apply the origin provisions in the EPAs and use EUR.1 forms while those that have not signed-up apply GSP and use Form As.

Information regarding tariff preferences available for any particular product from any particular country can be obtained from the TARIC database.

List of offices where blank certificates can be obtained.

EUR.1 & A.TR Certificates may be obtained by sending a faxed application to the following offices
Office	Contact Details
Dublin Port & Airport District, Revenue Commissioners, New Customs House, Promenade Road, Dublin 3.	Tel: 01- 8776208 Fax: 01- 8776280
Revenue Commissioners, Revenue House, Assumption Road, Blackpool, Cork.	Tel: 021- 6027000 Fax: 021- 6027103
Revenue Commissioners, Government Offices, The Glen, Waterford.	Tel: 051 - 862100 Fax: 051- 862252
Revenue Commissioners, River House, Charlotte's Quay, Limerick.	Tel: 061-402186 Fax: 061-402185
Revenue Commissioners, Geata na Cathrach, Fairgreen, Galway.	Tel: 091- 547700 Fax: 091- 547775

Further information

If you require further information or if you have a specific query on the general administration of preferential rules of origin you should contact the following office:

Office: Classification, Origin and Valuation Unit,
Customs Division,
Government Offices,
Nenagh,
Co. Tipperary.

Tel. 067 - 63260 / 63213 / 63325
Lo-Call: 1890 66 63 33

Fax. 067 - 63388

Email Address: Quota&OriginSection@revenue.ie

April 2010

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