Rules of Origin For Export
The UK is now governed by the UK-EU Trade and Cooperation Agreement. This means we are no longer part of the Customs Union. The UK no longer being part of this means:
- No duties, quotas and declarations which means goods can move around the member states freely
- Trade is frictionless between member countries, importing good between markets without fees, checks and paperwork
- Northern ireland under the new agreement will remain in the customs
Under the new agreement, although goods from the UK exported to the EU can be eligible for zero tariffs, they MUST meet the Rules of Origin (RoO), requirements, set out in the agreement. Good must be supported with the correct documentation. If not the goods maybe subject to EU tariffs. This also applies to goods imported to the UK from the EU.
What are the Rules of Origin?
The Rules of Origin determining the “economic nationality” of where the goods were made. It ensures that only goods produced in the UK or EU benefit from the zero-tariff agreement.
3 Steps to Comply with Rules of Origin
Classify Your Goods
- Classify good goods using the Harmonised System
- the first 6 digits of the 10-digit classification (commodity) code when importing goods into the UK or the EU.
- Find you products HS codes.
Meeting the Rules of Origin Requirements
- Understand your supply chain and where the materials come from
- Do they originate in the UK/EU/outside the EU?
- EU origin materials and processing can be counted as part of the process, but overall there has to be significant transformation/processing of the goods in the UK to meet the RoO requirements.
- If goods contain non-EU originating material you need to refer to product-specific rules.
Products Are ‘Wholly Obtained’
When goods naturally occur in a country. For example, live animals are reared; plants grown and harvested or natural minerals are extracted in a particular country.
Wholly obtained also covers goods produced from scrap and waste derived from manufacturing or processing operations, or from consumption.
Products Have Undergone A ‘Substantial Transformation’ in A Particular Country
When goods are considered to have been “substantially transformed”, having undergone specified manufacturing or processing.
There are a number of technical ways in which countries demonstrate this including when the manufacturing process. This results in the product
- Changing tariff classification or
- Calculating the percentage change in value-added
Proving Your Goods Qualify
- You must have evidence to prove your goods meet the rules of origin.
- You may also require a supplier declaration from your supplier as evidence of origin.
- Self-declare that your goods meet the RoO by making out a statement on origin and sending this to your customer with your export. The customer can use this as the basis of their claim for zero tariffs.
Importing goods into GB and then (re-)exporting them to the EU
To be eligible for zero tariff export to the EU, goods still need to comply with Rules of Origin. There must be some production in the UK. This applies to EU origin goods as well as to goods from the rest of world.
Useful Links & Further Information
- How to claim preferential (zero) tariffs when trading with the EU https://www.gov.uk/guidance/claiming-preferential-rates-of-duty-between-the-uk-and-eu
- Full Details of Rules of Orign when trading with the EU https://www.gov.uk/government/publications/rules-of-origin-for-goods-moving-between-the-uk-and-eu
- Online tool to check which Rules of Origin apply to your exports https://www.gov.uk/check-duties-customs-exporting
- Online tool to check which Rules of Origin apply to your imports