Rules of Origin are used in trading agreements between different countries, like the UK’s deal with the EU – called the Trade and Cooperation Agreement (TCA). The rules are used to determine the country of origin of goods being imported and exported and whether they’re eligible for preferential tariffs.

The preferential zero tariffs in the UK-EU TCA mean that if you buy goods from the EU and bring them into the UK, and they meet the rules of origin in the TCA, you will not need to pay any Customs Duty on those imports.

To benefit from preferential tariffs, you must have proof that:

• Goods you import into the UK from the EU originate in the EU.

• Goods you export from the UK to the EU originate in the UK.

The origin of goods needs to be declared on a customs declaration each time goods are imported or exported.

Declaring origin will be particularly important when importing goods.

When there is a preferential trade deal in place, the preferential origin is declared to obtain a reduced rate of duty. In the absence of a trade agreement, the non-preferential origin needs to be declared to ensure that appropriate trade policy measures are applied.

Declaring an incorrect country of origin may lead to non-compliance or even be considered fraud. For example, if the product imported from China is subject to anti-dumping duty but the duty is not paid because the importer declares it as originating in India, this would be viewed as an attempt to avoid tax.

The exporter/producer is responsible for determining the origin of goods and providing proof of origin when requested by the importer; however, it is the importer who is liable if the origin is incorrect.

Non-preferential origin is confirmed by a Certificate of Origin which can be obtained from Chambers of Commerce across the UK.

A Certificate of Origin is not mandatory and, in most cases, it is enough to declare non-preferential origin.

Preferential origin is certified in a number of ways, depending on the text of the agreement.

Preferential certificates take the form of a EUR1, a EUR-Med or a GSP FORM A document, or an exporter declaration on an invoice, for some agreements you also need to be an HMRC Approved Exporter.

A preferential origin certificate must be submitted as part of import documentation in order for the company to be able to profit from preferential duty rates. In many cases, the exporter is not the manufacturer of at least some, if not all, of the parts/inputs, used to produce the final goods. In such cases, the exporter is required to confirm the origin of these parts/ inputs with their supplier.

For importers, relying on the exporter’s origin determination can be risky. While the proof of origin is provided by the exporter/producer, it is the importer who is legally liable for the correctness of information provided to customs authorities at the time of import.

If a preferential proof of origin is rejected by customs for any reason, the importer will have to pay the full duty rate.

Related origin requirements: Establishing origin also depends on various other terms and administrative requirements being satisfied. These include conditions around record-keeping, invoicing and transport of the goods. Exporters must also be familiar with all these additional, origin-related requirements. Your local ChamberCustoms office can advise you on this process.

Rules of Origin are written into all trade agreements to protect a countries core production from low-cost imports and to ensure that reduced tariffs covered by the agreement are only available to goods originating in the countries that have signed the agreement. For example, a US company might want to export to the EU, but the US and the EU don’t have a trade deal. Without RoO the US company could export the goods to the UK and then move them into the EU, taking advantage of the UK: EU trade deal.

When the UK was part of the single market, goods produced in the UK could have components manufactured elsewhere in the EU. The finished product then conferred EU Origin status and benefitted from tariff-free entry into countries with which the EU had signed a trade agreement.

The rules vary for each commodity code, but generally speaking, if 50% of the price is considered as originating in the UK, then the goods would be considered to be of UK origin. For goods wholly originating in the UK, such as agricultural products, this isn’t an issue, but with modern supply chains, parts come from all over the world and some traders are finding that their products don’t meet the threshold for conferring UK Origin on their products for export to the EU.

When we were a member of the EU, parts from EU counties counted towards the origin of the goods and in some agreements they still can, as long as they are subjected to ‘substantial processing in the UK. This is called cumulation and is included in some format in most trade agreements.

For example, if you import Rice of EU Origin, produced in Italy, and then re-export the rice in the same condition as it arrived to a customer in Germany, you can’t claim UK Origin for the purposed of benefitting from preferential tariff rates. There is no ‘cumulation’. It doesn’t matter that the rice is being re-imported back to the EU. If you then process the rice in some way, adding UK origin inputs and repackage as a ready meal then the rice will have been subject to substantial transformation, will have changed its tariff heading and may then be able to enter the EU tariff-free.

There is a set list of processes that are seen as minimal and which do not change the origin of the goods, and repackaging is one of them. For example, if Norwegian salmon is imported into the UK and then repackaged for the consumer market, then repackaging is considered a minimal process that does not confer origin, so the goods remain of Norwegian origin. If the same Norwegian salmon is imported into the UK and is smoked and then repackaged for the consumer market, then the salmon can be considered of UK origin.

One of the main documents needed to export from the UK is a certificate of origin, which confirms where the goods and their components originate from. Without this, you cannot export to many markets around the world. Another document that businesses may need is a UK EUR1 preference certificate – this allows goods to be exported to countries where we have a trade agreement in place and avoids having to pay any tariff or duty at the importing border.

A EUR1 Movement Certificate is a type of Certificate of Origin used to support claims for preferential (usually zero) rates of duty in the country of importation where there is a trade agreement between the countries involved.

This is an area of trade that the ChamberCustoms and the Chamber of Commerce Network has a huge amount of experience. They have been issuing certificates of origin for exports to countries outside of the EU for a long time. For example, last year they issued 575,000 for businesses exporting over £20billion of goods to other markets.

Getting your team up to speed with customs compliance can save you time, money and lost sleep should HMRC or your customers start asking difficult questions. From the basics of what a customs declaration is to fully training in-house customs brokers, we offer a range of courses to keep your in-house team ready to keep you trading.

A UK Certificate of Origin is as its name suggests is a Certificate of Origin for goods where there is no trade agreement between the countries involved.

Both a EUR1 Form and a Certificate of Origin (UK) document can be purchased from your local Chamber of Commerce. Each Chamber sets its own price so no set price across the country but these will cost around £24 for Chamber members and £40 for non-Chamber members.