Brussels, 18/03/2005 (Agence Europe) - László Kovács, Taxation and Customs Union Commissioner, unveiled a Communication on Thursday setting out a strategy to establish new simplified rules of origin for the purposes of the EU's preferential trade arrangements with certain third countries. The rules of origin, which determine which goods can benefit from the lower rates of customs duty under the preferential trade arrangements, are currently too complicated and the Commission suggests replacing the current rules with a single value-added method for determining origin which would make them clearer as well as more development-friendly. The new Commission regulation (under the comitology procedure) will be adopted part way through this year and come into force at the beginning of 2006.
"I am very pleased that the Commission has adopted this framework for simplifying the complex customs rules of origin and making them more development-friendly" said László Kovács. The first axis of the new strategy is to simplify and relax the profusion and complexity of existing rules of origin. Preferential trade arrangements are aimed at increasing reciprocal trade in goods and access to the Community market for products from developing countries by eliminating or reducing customs duties. The rules of origin, that are designed to ensure that the customs preferences apply to products that originate (i.e. are wholly obtained or are substantially processed) in the country granted the preference, are currently too numerous, complex and inflexible as well as being open to abuse. The Commission's Communication therefore sets out a single, across-the-board criterion for determining the origin of non-wholly-obtained goods.
The single value-added rule would be a single, across-the-board criterion for determining the origin of non-wholly-obtained goods based, subject to further impact assessment, on a certain threshold of value added in the beneficiary country (or, where appropriate, regional group) concerned. The Commission recognises that the current system allows cases of abuse. There is currently a problem, for example, which is being investigated, of imports of sugar from the Western Balkans. Research is still needed to determine whether the new rule would apply across the board. “Under these proposed new rules, developing countries would be better able to benefit from the tariff preferences the EU offers them. The proposed new rules would also be of benefit both to traders and to customs administrations", said László Kovács. The tariff preferences might have to be renegotiated.
The second axis of the strategy is a rebalancing of the rights and obligations of operators and administrations. In particular, the current system of proving origin by means of a certificate signed by the exporter and stamped by the competent authorities of the country concerned would be replaced by a statement of origin by registered exporters. The Commissioner also mentioned the development of instruments to ensure that the beneficiary countries comply with their obligations. This would include measures to improve evaluation, information flows, training and technical assistance so as to assist co-operation between the Community and its preferential partners, as well as a system for the periodic monitoring of compliance.
In four to six weeks time, the Commission will submit to the relevant committee of member states' representatives its draft regulation, which it hopes will be adopted in mid-2005. It will not come into force until the start of 2006 at the earliest. The Communication published on Thursday follows a period of consultation launched in 2004 following the publication of the Green Paper on rules of origin in the EU's preferential trade regimes [COM(2003)787].