The rules of origin requirements are some of the most important provisions that your Business needs to understand and meet, under the UK’s deal with the EU.
The rules apply to Businesses that want to:
– Import Goods from the EU at Zero Tariffs
– Export Goods to the EU at Zero Tariffs
At the heart of the UK/EU Trade and Customs Agreement (TCA) are the conditions that apply for continued zero-tariff trade between the UK and the EU.
It’s complicated and you will possibly need the help of a customs agent such as AMCO to help.
For anyone manufacturing, the origin of your products and the origin of the materials and components you’re using to make it will affect what tariffs apply and those tariffs will vary depending on what percentage of your components are sourced in the UK.
Rules of Origin determine the economic nationality of goods. That means where the goods or products have been made, taking into account the processes and where the component parts have also come from. Rules of Origin are a standard part of free trade agreements. Goods and products produced and manufactured in the UK and in the EU are eligible for zero-tariffs.
For clarity, a tariff is any customs duty on imported or exported goods. Tariffs give a price advantage to locally produced goods over similar goods which are imported, and they raise revenues for governments.
However, Traders must prove that the goods or products are actually manufactured or produced in the UK or the EU to qualify for the benefits of zero-tariff.
To access this, the goods MUST meet the Rules of Origin requirements as set out in the TCA and, they must have the documentation to prove their origin.
If proof cannot be established then the goods might be subject to tariffs, either when imported into the EU or when imported into the UK.
Goods imported into the UK that have had customs clearance cannot be freely circulated in the EU and vice versa. So, to be eligible for zero-tariff export to the EU, the goods must comply with the Rules of Origin. This means there must be some significant production in the UK. If the goods enter the UK and then are distributed around the EU with no added value manufacturing or no production, then they most likely will attract tariffs. This is true of EU goods going the opposite way.
There are three main things that you need to do to comply with the Rules of Origin if you are an exporter:
- Classify your Goods for Customs
- Understand if your Goods meet the Rules of Origin
- If you’re Goods do meet the Rules – then you MUST be able to prove and demonstrate that
Classifying your goods is the most important and the first step you need to take to comply with the Rules of Origin. All goods in International Trade are classified under the Harmonised system which covers everything you could think of from Aircraft to Zoo Animals and everything between.
Here are some useful links:
https://www.trade-tariff.service.gov.uk/a-z-index/a
https://www.gov.uk/guidance/finding-commodity-codes-for-imports-or-exports#use-the-trade-tariff-tool
For further help and guidance on the Rules of Origin, call the AMCO European Team now on 0800 054 8000.