The European Commission proposed, on Monday 24 August, to relax the rules of origin provisions in the free trade agreements linking the European Union to 20 neighbouring countries in the Pan-Euro-Mediterranean region in order to facilitate economic recovery following the coronavirus outbreak.
The aim of this initiative is to make trade more fluid by making the rules of origin, which enable a producer to certify the origin of his products and the customs authorities to control the origin of products, more flexible and better adapted to market needs.
The following 20 non-Member States or jurisdictions are concerned: Iceland, Liechtenstein, Norway, Switzerland, Faroe Islands, Turkey, Egypt, Israel, Jordan, Lebanon, Palestine, Georgia, Moldova, Ukraine, Albania, Bosnia and Herzegovina, North Macedonia, Montenegro, Serbia and Kosovo.
Under the new provisions, transactions, which add value to a product in order to benefit from preferential treatment under the rules of origin, will be able to take place in several countries (‘full cumulation’ ). This will facilitate the integration of supply chains within the target geographic area.
In addition, the thresholds related to the incorporation of materials or components not benefiting from the rules of origin will be increased from 10% to 15%. The current ban on duty-drawback on imported components will also be abolished for a large number of products. Finally, in connection with logistical considerations, the so-called ‘direct transport’ rule, which makes it more difficult to maintain the origin of a product when it is in transit through a foreign country, will be replaced by a non-handling rule, which is considered more flexible.
Currently under revision, the Pan-Euro-Mediterranean Convention on Rules of Origin, to which the EU and 24 non-Member States are parties to, remains in force. The economic operators concerned will be able to choose whether to continue to apply it or to comply with the future rules.
See Commission proposals: https://bit.ly/34sSN4h (Original version in French by Mathieu Bion)