Non-preferential rules of origin are a set of rules that determine the country of origin of goods. These rules apply to all goods imported into the EU. The country of origin of a good determines the application of:
- the most-favoured nation treatment (MFN)
- various commercial policy measures such as:
- anti-dumping and countervailing duties
- trade embargoes and sanctions
- safeguard measures
- quantitative restrictions or tariff quotas
Non-preferential rules of origin are also used for trade statistics, public tenders and origin marking.
The EU applies its own non-preferential rules of origin, which may be different from those of a third country.
General aspects of non-preferential origin of goods
Tariff classification
An essential factor to determine the origin of goods is their tariff classification. The EU identifies traded goods using a code number from the Combined Nomenclature (CN code), and it is crucial to establish their tariff classification to determine their origin.
Concepts
The origin of goods is based on 2 basic concepts (see Article 60 of the UCC):
- ‘wholly obtained’ products are entirely produced within a single country, including those obtained in their natural state as well as products derived from them. A comprehensive list is provided in Article 31 UCC-DA.
- products that underwent a ‘last substantial transformation’ in the last country of production, in cases where two or more countries are involved in the production of goods.
Determining non-preferential origin
Article 60(1) of the UCC applies when only 1 country is involved in producing the goods (‘wholly obtained’ goods).
Article 60(2) of the UCC applies when 2 or more countries are involved in manufacturing a product.
Some rules apply to all products:
- Certain types of processing – known as ‘minimal operations’ (Art. 34 UCC-DA) - never confer non-preferential origin on a product.
- If the processing operation performed in another country is intended to avoid certain tariff measures, it will be considered not economically justified (Art. 33 UCC-DA).
In both cases, the country of origin of the goods is the country where the major portion of the materials originated, based on the value or the weight of the materials as indicated for the Chapter of the tariff classification.
Determination of Origin for Products Included in Annex 22-01 UCC-DA
- For specific goods, Annex 22-01 UCC-DA sets legally binding rules to determine the criteria and operations that must be met or carried out in the last country of production to confer non-preferential origin.
- The rules in Annex 22-01 should be read alongside the introductory notes, which explain how to apply these rules.
- The applicable list rules for products in Annex 22-01 are clearly highlighted in the "list rules" table.
- If the list rule is not met in the last country of production, the country of origin is determined using the "residual rules". In that case, the country of origin of the goods is the country where the major portion of the materials originated, based on the value or the weight of the materials as indicated at the beginning of each Chapter of the tariff classification.
Determination of Origin for Products Not Included in Annex 22-01 UCC-DA
- For goods not listed in Annex 22-01 UCC-DA, the origin is determined on a case-by-case basis, considering any process or operation in relation to the concept of the last substantial processing or working, as defined in Article 60(2) of the UCC.
- No legally binding rules exist for these products. However, to ensure a harmonised interpretation of the 'last substantial transformation' principle, non-legally binding "list rules" are indicated in a non highlighted manner. The application of these rules should align with the principle established in Article 60(2) UCC.
- The definitions and rules from the “introductory notes to the table of list rules" apply in a non-binding manner to these products.
- If the list rule is not met in the last country of production, the country of origin is determined using the "residual rules". In that case, the country of origin of the goods is the country where the major portion of the materials originated, based on the value or the weight of the materials as indicated at the beginning of each Chapter of the tariff classification.
Declaration and Proof of Origin
- The non-preferential origin of goods is a mandatory part of the declaration for release for free circulation within the EU.
- The declarant is responsible for correctly determining the origin and should have information on the processing carried out in the last country of production of the goods being declared for release.
- Proof of origin refers to any evidence provided to support the declared origin. Customs authorities should not require a non-preferential certificate of origin issued in a third country as proof of origin, except in specific cases.
- The only exception is for products subject to special non-preferential import arrangements, as outlined in Articles 57-59 UCC-IA and Annex 22-14 UCC-IA, where such a certificate is required by legislation to qualify for access to a specific quota.