Ad valorem duty
Duty levied as a percentage of value of the services or goods being imported, rather than on their weight or the number of units.
Additional duties are taxes on traded goods. The possible types of additional duties are
African, Caribbean and Pacific countries (ACP)
ACP - The African, Caribbean and Pacific Group of States (ACP) is an organisation composed of 79 African, Caribbean and Pacific states, created by the Georgetown Agreement in 1975. All of them, except Cuba, are signatories of the Cotonou Agreement, also known as the "ACP-EC Partnership Agreement". The agreement regulates preferential trading conditions, as well as political, commercial and development relations with the EU.
In December 2019, the ACP's Council of Ministers endorsed a revision of the Georgetown Agreement that will transform the current ACP Group of States into the Organisation of African, Caribbean Pacific States (OACPS).
Importing into the EU under EPA
EPA - Eastern and Southern Africa
EPA SADC: Southern African Development Community
Airworthiness tariff suspension
Suspension of common customs tariff duties for parts, components and other goods intended for incorporation or use in civil aircraft and falling within Chapters 25 to 97 of the Common Customs Tariff (CCT), for which an airworthiness certificate has been issued by a party authorised by aviation authorities in the EU or a non-EU country.
Dumping is exporting at below national market cost to gain market share on the world market. Article VI of the 1994 GATT authorises anti-dumping duties to be levied on dumped goods equal to the difference between their export price and their normal value, if dumping causes injury to producers of competing products in the importing country.
Anti-dumping duty (AD)
Dumping is exporting at below national market cost to gain market share on the world market. Anti-dumping duties are taxes imposed on imported goods in order to compensate for the difference between their export price and their normal value, if dumping causes injury to producers of competing products in the importing country. Anti-dumping duties are enabled by Article VI of the GATT.
An exporter who has met certain conditions imposed by the customs authorities and who is allowed to make out invoice declarations. The customs authorities can also withdraw approval from exporters who abuse it. The approval procedures depend on national rules.
Customs document used for the export, transit and temporary admission of goods for specific purposes, e.g. for displays, exhibitions and fairs, as professional equipment and as commercial samples.
Authorised Economic Operator
The AEO concept is based on the Customs-to-Business partnership introduced by the World Customs Organisation (WCO) with a view to ensure supply chain security whilst facilitating customs procedures.
Traders who voluntarily meet a range of criteria work in close cooperation with customs authorities.
This implies that there must always be a relationship between customs and the applicant/AEO.
This relationship must be based on the principles of mutual transparency, correctness, fairness and responsibility.
An agreement between two entities that is legally binding only for these two entities, with benefits typically not shared with others.
Provision under agreements between two countries/entities that allows each member of the agreement to use products originating in the other without the final good losing its originating status.
Goods produced from originating materials in one FTA country and further processed in the other, can then be exported back to the first country under preferential treatment. Without cumulation only the inputs originating in the exporting country could be counted towards the originating status.
Document representing the transport contract between the shipper and the carrier. It also constitutes proof of ownership of the goods.
Written information issued by national customs authorities in EU countries on the preferential or non-preferential origin of specific goods to be imported or exported.
Written information issued by national customs authorities in EU countries on how goods are classified in the Combined Nomenclature or a nomenclature based on it, such as the TARIC. Therefore, the BTI identifies the right tariff classification for the goods exported.
Political organisation, subgroup of the African, Caribbean and Pacific Group of States, that serves as a base for economic dialogue with the European Union. It was established in 1992. Its membership comprises the 15 Caribbean Community states, along with the Dominican Republic. All Participating States in CARIFORUM, with the exception of Cuba, are signatories to the ACP-EU Partnership Agreement or “Cotonou Agreement” and the EPA, respectively.
The member states are: Antigua and Barbuda, The Bahamas, Barbados, Belize, Cuba, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St. Kitts and Nevis, Saint Lucia, St. Vincent and the Grenadines, Suriname and Trinidad and Tobago.
A method of exporting goods, where the exporter selects the carrier and pays the freight costs to the named destination. When the first carrier takes possession of the goods, all risks of loss or damage – including any increase in shipping costs – are transferred from the seller to the buyer. CIP indicates that the seller is required to provide insurance and pay the related premium.
Method of exporting goods, where the exporter pays for transport of goods to the named destination. The buyer is responsible for all risks of loss or damage, as well as any additional charges that may arise after the first carrier has taken possession of the goods. When the goods are delivered to the carrier, the responsibility for risk is transferred from the seller to the buyer.
The letters CE appear on many products traded on the extended Single Market in the European Economic Area (EEA). By affixing the CE marking to a product, a manufacturer declares that the product meets all the legal requirements for CE Marking and can be sold throughout the EEA without restriction. This also applies to products made in other countries that are sold in the EEA. The CE marking does not indicate that a product has been approved as safe by the EU or another authority. Not all products must have CE marking. It is compulsory only for most of the products covered by the New Approach Directives.
Certificate required by some customers, importing countries and industry sectors, proving that the quality and conformity of the goods have been inspected by a specialised inspection company.
Document issued by the competent governmental authorities certifying the country where the good was produced. For example, the EU's preferential arrangements with certain countries require a movement certificate EUR.1 or EUR-MED.
Person who manages transport of freight by land, air or sea.
CHIEF is the HMRC computer system that handles the collection of Customs and Excise duties, statistics and reporting on trade flows. It stands for Customs Handling of Import & Export Freight. This system is due to be replaced by CDS (Customs Declaration Service) which is gradually being adopted initially for freight under the Northern Ireland Protocol with the intention of rolling out across the UK.
The Codex Alimentarius, or "Food Code" is a collection of standards, guidelines and codes of practice adopted by the Codex Alimentarius Commission (CAC), relating to foods, food production and food safety. It aims to protect consumer health and promote fair practices in food trade. CAC is established by the Food and Agriculture Organisation (FAO) and the World Health Organisation (WHO) of the United Nations.
The list of traded goods, based on the harmonised system, which makes it possible to apply the Common Customs Tariff and other EU policies, as well as to compile statistics on foreign trade.
Eurostat (EU statistical office) reference database on trade of goods. COMEXT contains all statistics on trade in goods inside the EU between its member countries, and between the EU and its trading partners worldwide.
Designates all EU rules that establish import and export duties and exemptions for specific goods, including agricultural, anti-dumping and preferential duties, tariff quotas and tariff suspensions.
Customs procedure that allows goods to be moved from one point in the EU to another.
Batch of goods, which is either sent simultaneously from one exporter to one consignee, either is accompanied by a single invoice or a single transport document covering their shipment from the exporter to the consignee.
Document accompanying goods that is filled by the shipper. It serves as proof that a contract for carriage has been concluded and describes its content. It also serves as a receipt when goods are picked up from the shipper and delivered to the recipient.
International agreement between governments that aims to ensure that international trade in specimens of wild animals and plants does not threaten their survival.
In a contract specifying that a sale is CFR, the seller pays for the carriage of goods by sea to the port of destination and provides the buyer with the documents necessary to obtain the goods from the carrier. Costs for loading onto the ships, export formalities and marine insurance are also borne by the seller.
A method of exporting goods, where the seller pays for the carriage of goods by sea to the port of destination as well as for the maritime insurance policy against the risk of loss or damage to goods during transport. Costs related to loading onto the ships and export formalities are also borne by the seller. Until the loading of the goods onto a transport ship is complete, the seller bears the costs of any loss or damage to the product. Further, if the product requires additional customs or export paperwork or requires inspections or rerouting, the seller must cover these expenses. Once the freight loads, the buyer becomes responsible for all other costs.
Treaty between the European Union and the African, Caribbean and Pacific Group of States (ACP countries). Signed in June 2000, it constitutes the framework for cooperation between the members of the ACP countries and the EU. The fundamental principles of the Cotonou Agreement include equality of partners, global participation (states and non-state actors), dialogue and regionalisation.
Countervailing duties, also known as anti-subsidy duties, are import duties imposed under World Trade Organization (WTO) rules and aimed to neutralise the negative effects of subsidies. They are imposed after an investigation finds that a foreign country subsidises its exports, injuring domestic producers in the importing country.
Countervailing duties on subsidised goods
The abbreviation stands for ‘Change of Chapter’. See ‘Change of tariff classification’.
Provision under trade agreements that allows for goods originating in country A and further processed or added to products originating in country B, to be considered as originating from country B.
Therefore, it provide producers with flexibility in terms of sourcing inputs and parts, allowing them to use inputs and parts from suppliers located in other partner countries and still qualify for preferential tariffs. There are four types of cumulation: bilateral, diagonal, regional and full cumulation.
Authorities or agencies responsible for collecting duties and for controlling the flow of goods, including animals, transports, personal, and hazardous items, into and out of a customs territory (such as a country or a customs union). The functions of customs cover the aspects of taxation, security and trade facilitation.
Tax imposed on imports by the customs authority of a country, for e.g. as a percentage of the value or at a specific rate.
Value of goods established in accordance with the customs rules for determining the level of ad valorem duties
Method of exporting goods, where the seller fulfils his delivery obligation when the goods have been delivered at the designated border-crossing, at the designated frontier, yet before the customs frontier of the neighbouring country. It is used primarily for ground and rail carriage.
Method of exporting goods where the seller is responsible for all stages, including customs clearing and paying any duties or taxes. The risks and costs are transferred only when the goods are delivered to the buyer. In general, the seller is responsible also for unloading the goods.
Method of exporting goods where the seller's obligations have been met once the goods have been made available to the buyer at the named destination in the country of import.
The seller bears the risks and costs in connection with the transport to that location, with the exception of duties, taxes and other official levies payable upon import and excluding the costs for customs formalities to be fulfilled. The buyer is liable for any duties, taxes or other official charges required upon import.
Method of exporting goods where the seller has met his delivery obligations once the goods, which have cleared customs for import, have been made available to the buyer on the quay (unloading wharf) at the agreed port of destination. This term may be used only if the seller was able to obtain an import licence.
Method of exporting goods where the seller has met his delivery obligations once the goods, which have not cleared customs for import, have been made available to the buyer on board the ship at the named port of destination.
Provision under agreements between more than two countries, that allows members to use products originating in the others without the final good losing its originating status.
Goods produced from originating materials in one FTA country and further processed in another, can then be exported back to any of the member countries under preferential treatment. Without cumulation only the inputs originating in the exporting country could be counted towards the originating status.
Provision under trade agreements that require originating goods to be transported directly from one party's territory to another, aiming to ensure that goods arriving in the country of import are the same as those that left the country of export.
If, for any reason, the goods pass through or stop over in a country that is not a partner country, the conditions of direct transport might be considered met if the goods stay under customs supervision during that time.
Occurs when a country or company exports a product at a price that is lower in the foreign importing market than the price in the exporter's domestic market, in order to gain market share and harm other competitors.
Refund for duties previously paid on non-originating materials that were used to produce a final good exported under a preferential tariff.
Trade and development arrangements between the EU and the African, Caribbean and Pacific (ACP) countries - designed to facilitate the ACPs' integration into the world economy through gradual trade liberalisation and improved trade-related cooperation. They are set within the framework of the EU-ACP Partnership Agreement (known as the Cotonou agreement) that governs relations between the EU and the ACP countries.
Under the EPAs, EU markets are immediately and fully opened, while the ACPs have 15 years to open to EU imports (with protection for sensitive imports) and even up to 25 years in exceptional cases.
Economic Partnership Agreements (EPAs)
EPA - Eastern and Southern Africa
EPA SADC: Southern African Development Community
The EU-CARIFORUM Economic Partnership Agreement
The EU - Pacific States Interim Partnership Agreement
Trade is today greatly facilitated by online platforms for e-commerce. These can either be individual e-commerce platforms, i.e. own online shops, or hosted platforms where a firm offers an interface and usually back-office software for different sellers and buyers (for example Ebay or Amazon). E-commerce platforms facilitate trade because they enable sellers from one country to get easily in touch with customers from other countries. Sellers can advertise and offer their goods and services on such platforms to many potential customers. Similarly, such platforms facilitate the search for adequate products for customers as they will be presented with and can compare between different sellers. Customers can be either end-users or other firms which use these goods for their own production process or service.
If you consider to sell your product via such online channels to customers in foreign markets, it is nevertheless necessary to assess the same exporting requirements as for traditional sales channels. When selling small quantities to end-users it is important to inform yourself about de minimis rules. Such rules often exempt low-value items from tariffs and have only minimal formal requirements regarding the necessary documentation. You can find more information on de minimis regimes here
Depending on the products you want to sell, additional requirements may need to be assessed. For example, you will need to consider questions about the payment gateways used online, about requirements in your target market about data privacy and the cross-border transfer of data, or questions how to handle warehousing and the logistics.
You can contact chambers of commerce, export promotion agencies, consultancies or similar institutions for help in this process (LINK to useful contacts). The Enterprise Europe Network also offers a general guide for SMEs to e-commerce in Europe which includes information on overseas markets.
The “Entry Price System” establishes a minimum price threshold above which the price of imported produce should remain. It applies to imports of 15 kinds of fresh fruits and vegetables to protect its producers against international competition. These thresholds depend on the product, the partner country and the season. EPS applies in combination with ad valorem import tariffs.
In general law, an act, decision or judgement that affects all parties, not just those directly concerned.
Abbreviation of European Union (EU) which consists of 27 countries (Belgium, Bulgaria, Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden), as of 1 February 2020. (UK left the EU on 31/1/2020)
Certificate of origin applicable in preferential trade within the pan-Euro-Mediterranean cumulation area.
Certificate of origin applicable in some EU preferential trade arrangements.
The currency of the countries belonging to the euro area.
Union between EU Member States and 16 Southern Mediterranean countries built on cooperation agreements, that aims to promote economic integration and democratic reform across the EU’s neighbours to the south, in North Africa and the Middle East.
The European Commission is the executive branch of the European Union, responsible for proposing legislation, implementing decisions, upholding the EU treaties and managing the day-to-day business of the EU. The European Commission has its headquarters in Brussels, Belgium, and some services also in Luxembourg. The Commission has Representations in all EU Member States and 139 Delegations across the globe.
The European Community merges three former European Communities - for nuclear energy (EURATOM), coal and steel (ECSC) and the European Economic Community (EEC or Common Market).
Unites the EU Member States and the three EEA EFTA States (Iceland, Liechtenstein, and Norway) into an Internal Market governed by the same basic rules. These rules aim to enable goods, services, capital, and persons to move freely about the EEA in an open and competitive environment, a concept referred to as the four freedoms.
Former regional organisation that aimed to bring about economic integration among its member states. It was created by the Treaty of Rome of 1957. Upon the formation of the European Union (EU) in 1993, the EEC was incorporated and renamed the European Community (EC). In 2009, the EC's institutions were absorbed into the EU's wider framework and the community ceased to exist.
Regional trade organisation and free trade area consisting of four European states: Iceland, Liechtenstein, Norway, and Switzerland. The organisation operates in parallel with the European Union (EU), and all four member states participate in the European Single Market and are part of the Schengen Area. They are not, however, party to the European Union Customs Union.
Countries part of the European Free Trade Association. They are Iceland, Liechenstein, Norway and Switzerland.
The European Union is a unique economic and political union between 27 EU countries that together cover much of the continent. It is the largest trade block in the world, the biggest exporter of manufactured goods and services, as well as the biggest import market for over 100 countries. The EU's main economic engine is the single market. It enables most goods, services, money and people to move freely.
The EU's statistical office. Eurostat collects and publishes comparable statistics from all countries in the EU by standardising methods under the European Statistical System (ESS).
A trade preferential scheme adopted in 2001 for the 49 least developed countries. It grants duty- and quota-free access for almost all products, except arms and ammunition. It is regulated by Regulation (EU) No 978/2012 of the European Parliament and of the Council.
The price paid for the product ex-works (i.e. when it leaves the factory). It is a widely used international shipping term. The ex-works price includes the value of all the materials used and all other costs related to its production, minus any internal taxes, which are, or may be, repaid when the product obtained is exported.
A tax on quantity, rather than value of goods - for example N euros per hectolitre of alcohol sold. This is a duty paid to consume certain products. Generally levied on alcohol, tobacco, energy products (oil, gas, etc), vehicles and "luxury" products.
Sea zones, regulated by the United Nations Convention on the Law of the Sea, over which states have special rights regarding the exploration and use of marine resources. Exclusive economic zones stretch from the baseline out to 200 nautical miles from its coast.
In the framework of preferential trade arrangements, exporter means a person or company located in one of the countries which are part of that preferential trade arrangement, who, in accordance with the requirements laid down in the laws and regulations of that country, sells the originating product.
If the application of the common customs tariff duty rate depends on the entry price of the imported consignment, the veracity of the price is checked using a flat-rate import value calculated by the Commission, by product and by origin, on the basis of the weighted average of prices for the product on member countries' representative import markets or on other markets, where appropriate.
Method of exporting goods, where risks and costs are transferred alongside the ship at the port of loading. The customs clearance formalities, costs and risks are borne by the buyer from then on.
Method of exporting goods, where the seller's obligations are fulfilled once the duty-paid goods are delivered to the buyer's appointed carrier at the agreed place. The term can refer to all means of transport – air, rail, road, sea or a combination of these.
The consigner meets the sending costs.
Method of exporting goods, where the cost of delivering the goods to the nearest port is included in the price of the product but the buyer is responsible for the shipping from there and all other fees associated with getting the products to its destination. It is a widely used international shipping term.
Method of exporting goods, where the seller is required to deliver the goods on board the rail. Thus, the seller has to bear all expenses upto and including shipment of goods on behalf of the buyer.
Once the goods are put on board on rail, the property in the goods passes to the buyer and they are at the risk of the buyer, who is responsible for their freight, insurance and subsequent expenses.
Transport of goods executed by a carrier, under the terms of an agreement with the consigner.
Provision of trade agreements that allows cumulation to be applied between any number of countries to goods not originating in the FTA member country and processed in the FTA territory. Full cumulation allows cumulating origin-counting processing added across the FTA territory even when the initial input is not originating. Full cumulation is the most flexible type of cumulation.
Materials that are of the same kind and commercial quality, with the same technical and physical characteristics, and which cannot be distinguished from one another once they are incorporated into the final product.
Treaty that was precursor to the World Trade Organisation (WTO). It served as a framework for negotiations aiming to liberalise world trade and helped structure the multilateral trading system.
GATT 1947 refers to the old version of the GATT, whereas GATT 1994 is the new version of the General Agreement, incorporated into the WTO, which governs trade in goods.
Import tariffs applicable to all goods not originating in countries falling under the MFN treatment or to goods of unknown or doubtful origin.
Provision that allows manufacturers to use non-originating materials up to a specific percentage value of the ex-works price. However, if the specific working or processing rule already allows the use of a percentage of non-originating materials, the tolerance cannot be used to exceed that amount.
The maximum percentage is always that allowed by the specific rule. The percentage of the tolerance allowed varies from one preferential scheme to another.
A trading system that grants unilaterally preferential tariffs to certain countries on a non-reciprocal basis. It was approved by GATT in 1971, allowing industrialised members to adopt one-way tariff preferences in favour of developing countries.
The waiver was made more general and permanent in 1979 with adoption of the "enabling clause" allowing industrialised countries to implement measures extending "differential and more favourable treatment" to developing countries.
The EU launched this preferential system in 1971 to help developing countries sell more of their products in industrialised countries and build up their own industry. GSP preferences are granted to exports of specific products from particular countries.
Special EU scheme to encourage sustainable development and government. It grants additional preferences to help vulnerable developing countries ratify and implement the international conventions on human rights, workers' rights, environmental protection and good government.
Organism whose genome has been engineered in the laboratory in order to favour the expression of desired physiological traits or the generation of desired biological products.
Means both a material and a product.
Term used to exclude from the generalised system of preferences (GSP) products originating in a beneficiary country, when they reach a level of competitiveness on the EU market at which they no longer need the GSP to compete. Unlike the previous GSP which had GSP-specific "sectors", graduation is now based on the "sections" of the Common Customs Tariff (CCT). A section (i.e., a large group of products in a particular sector – the CCT has 21) from individual countries are “graduated” (excluded) from GSP when those products exceed 15% of EU imports under the GSP of the same products as an annual average over the last three years.
An international nomenclature developed by the World Customs Organisation (arranged in six-digit codes), allowing all participating countries to classify traded goods on a common basis. Beyond the six-digit level, countries are free to introduce national distinctions for tariffs and many other purposes. Hence, up to the HS-6 digit level, all countries using the Harmonised System classify products in the same way.
Import duties are paid when the products enter the EU customs territory, while VAT is paid in the country where the product is sold. So, if the products arrive first in the Netherlands before reaching the final destination in France, import duties will be paid in the Netherlands, but VAT will be due in France
In the framework of preferential trade arrangements, refers to the person or company who buys the originating product and claims preferential tariff treatment for it.
‘Importer’s knowledge’ allows the importer to claim preferential tariff treatment based on his own knowledge of the originating status of imported products in the form of supporting documents or records provided by the exporter or manufacturer of the product, which are in the importer’s possession. This information provides valid evidence that the product qualifies as originating.
International commercial terms. Eleven terms of sale accepted worldwide in assignment of costs and responsibilities between the buyer and the seller. Proposed, updated, and copyrighted by the International Chamber of Commerce (ICC), they serve as global standards for uniform interpretation of common contract clauses in international trade.
The last revision is named 'INCOTERMS® 2020.' In brief these terms are (1) Ex Works (EXW), (2) Free Carrier (FCA), (3) Free Alongside Ship (FAS), (4) FOB (Free On Board Vessel), (5) Cost and Freight (CFR), (6) Cost, insurance and freight (CIF), (7) Carriage Paid to (CPT), (8) Carriage and Insurance Paid to (CIP), (9) Delivered At Place (DAP), Delivered At Place Unloaded (DPU), Delivered Duty Paid (DDP).
Operations regarded as too minor to confer originating status to non-originating materials that are used in the production. All preferential rules of origin contain an article defining such operations. These are e.g. simple mixing, simple assembly of parts, and ironing of textiles. On the other hand, insufficient operations are important for cumulation as they set the minimal level of processing that has to be carried out and impact the allocation of origin to the product.
The insurance certificate specifies the value of the goods and the insurance premium.
VAT and other duties applicable to a given product inside the country concerned.
International agreement setting international standards for plant health measures. These standards, directives and recommendations are recognised as global references by the World Trade Organisation (WTO), in particular the Agreement on Sanitary and Phytosanitary Measures (SPS).
Detailed explanations accompanying the product specific rules of each preferential trade arrangement of the EU. They can be found in the Protocol/Chapter on rules of origin, right before the product specific rules.
The invoice declaration (also called origin declaration) is filled by the exporter concerning the origin of a product, on the basis of certain commercial documents. The objective of this declaration is to prove that the product is originating in a certain country, under the terms of a certain preferential trade arrangement. The name of the document differs depending on the preferential trade arrangement.
Provision that allows imported raw materials or semi-manufactured goods to be processed for re-export within the community, by community manufacturers, without manufacturers having to pay customs duty and VAT on the goods being used.
Least developed countries (LDCs) are low-income countries confronting severe structural impediments to sustainable development. They are highly vulnerable to economic and environmental shocks and have low levels of human assets. There are currently 47 countries on the list of LDCs which is reviewed every three years. LDCs have exclusive access to certain international support measures, in particular in the areas of development assistance and trade.
List of working or processing which must be done on non-originating materials in order for the product manufactured to obtain originating status.
For maritime and air transport, the document listing the cargo on board the means of transport. The document may be used for customs purposes, subject to prior authorisation, when it contains the necessary information in particular with regard to the customs status of the goods and their identification.
Any kind of working or processing.
Any substance used in the manufacture of a product, including any ingredients, raw materials, components or parts.
A rules of origin requirement established by trade agreements and WTO rules, that sets a maximum percentage of materials which are not originating in the country of export and ce be used within a good that qualifies as originating.
One of the 27 countries that are part of the European Union. Read more
South American trade bloc established by the Treaty of Asunción in 1991 and The Protocol of Ouro Preto in 1994.
Its full members are
Venezuela is a full member as well but has been suspended since December 1, 2016.
Associate countries are
Observer countries are New Zealand and Mexico. The bloc has reduced tariffs on trade between those countries by up to 90%.
Minimal operations are operations regarded as too minor to ever confer originating status, whether carried out individually or in combination. All preferential origin rules contain an article defining the working or processing which is insufficient to confer originating status. This applies even if the product satisfies the list rule. On the other hand, when determining origin within a cumulation system, any working or processing carried out must exceed the above-mentioned minimal operations but does not necessarily need to satisfy the relevant list rule for the arrangement.
The principle of not discriminating between one’s trading partners, i.e. all are granted "most favoured nation treatment". Under WTO rules, an advantage negotiated with one country must be extended to all trading partners who are WTO members.
EU trade policy works externally on two complementary levels: multilateral and bilateral. The “multilateral” level refers to the system of trading rules agreed by all WTO member countries.
Provision under preferential trade arrangements related to the transport of originating goods from one party's territory to another. If, for any reason, the goods pass through or stop over in a country that is neither the partner country nor an EU country, the provision allows for the splitting of consignments in a third country and some other operations provided that the goods remain under customs supervision in the country of transit.
Materials, that do not qualify as originating under an EU preferential trade arrangement including materials whose origin is unknown or not possible to determine.
Products that do not fulfil rules of origin set by a given preferential trade arrangement, therefore cannot benefit from the preferential duty rates of that trade arrangement.
Initial name of the World Organisation for Animal Health, which addresses international standards concerning animal health.
The official publication of record for the European Union. EU legislation can only become legally binding once it has been published in the Official Journal.
Designates the “economic nationality” of the goods and shall not to be confused with "provenance". A good's origin determines what duties, measures, equivalent taxes, quantitative restrictions and obligations apply.
Originating means fulfilling all applicable rules of origin in an EU preferential trade arrangement. These are (i) wholly obtained or produced products, or (ii) products that fulfil the product specific rules. Products produced exclusively from these originating materials are also considered originating. See also non-originating materials.
Materials that are originating in a party to a certain preferential trade arrangement because they meet rules of origin set out in that preferential trade arrangement. See also ‘Originating status’.
Products that are originating in a party to a trade arrangement because they meet rules of origin set by a given preferential trade arrangement, and therefore can benefit from the preferential duty rates of that preferential trade arrangement. See also ‘Originating status’.
In the framework of a trade agreement, products have originating status in a partner country if they are (i) wholly obtained or produced products, or (ii) products that fulfill the product specific rules. Products produced exclusively from these originating materials are also considered originating.
Twenty-five OCTs are administrative units spreading from the Poles to the Tropics, associated with the European Union. All are islands, of which three have no permanent population.
Although small in either size or population, or both, due to their constitutional relationships with Denmark, France, the Netherlands and the United Kingdom, the OCTs play an important role as outposts of the Union in the areas where they are located, but do not, however, form part neither of the EU territory, nor of the EU single market
Indicates how the goods for export are packed. It identifies the contents of the boxes and gives the volume, weight and dimensions of each parcel in the consignment. Customs agents will request the list when goods are exported or imported, and operators and customers must be able to produce it.
System of cumulation of origin between the EU, EFTA States, Turkey, the countries which signed the Barcelona Declaration, the Western Balkans and the Faroe Islands.
The PEM Convention on rules of origin aims at establishing common rules of origin and cumulation among 25 Contracting Parties (the EU, EFTA, Balkan countries, Southern and Eastern neighbourhood FTA partners) and the EU to facilitate trade and integrate the supply chains within the zone.
The list of the PEM Contracting Parties
The location (point of delivery) where goods are unloaded or signed for.
Practice of employing specialised private companies to check shipment details of goods ordered overseas, such as price, quantity, quality, etc. It ensures that production complies with the governing specification, contract, or purchase order.
Rules of origin applied in a preferential trade arrangement.
In the framework of a trade agreement, the predetermined maxim volume of goods originating in a specified country/territory that can benefit at import from favourable rates of duty.
Requires that the working or processing must be carried out on the territory of the parties. Modern manufacturing processes mean it is not always possible to meet this requirement. It may be necessary to do some processing in a country not party to the preferential arrangement. Some arrangements allow such external working or processing, provided that it conforms to certain specified conditions. Failure to comply with the specified conditions will result in the returning product being treated as non-originating.
Origin criteria in the product specific rules. A product is considered originating if it underwent certain processing operations specified in the product specific rules.
Article 3.2 of the EU- Japan Economic Partnership Agreement
Products that have been produced exclusively from originating materials (i.e. materials that have already obtained their originating status because they are wholly obtained or fulfilled product specific rules or through cumulation) will always be considered as originating products.
List of working or processing operations which must be done on non-originating materials in order for the product to obtain originating status (and therefore benefit from the preferential tariff treatment provided under that preferential trade arrangement). These rules are part of the Protocol/Chapter on rules of origin in each preferential trade arrangement.
Document declaring that the goods fulfill the rules of origin laid down in a certain preferential trade arrangement, thus supporting the claim for preferential treatment under that preferential trade arrangement. There are different types of proof of origin, depending on the preferential trade arrangement such as a certificate of origin issued by the customs administration or public authority or a statement on origin / an invoice declaration / an origin declaration made out by an exporter.
Specific numerical limits on the quantity or value of goods that can be imported (or exported) during a specific period.
The quantity of goods of a specific kind that may be imported into a country without restriction or imposition of additional duties
Form of diagonal cumulation, which exists only under the generalised system of preferences (GSP) and operates between members of a regional group of beneficiary countries (e.g. ASEAN).
Requirement for a minimum percentage of a good to be produced in the producer’s local region, in order to qualify as originating.
The system of certification of origin of goods that applies for the Generalised System of Preference (GSP) of the European Union since 1 January 2017. It is based on a principle of self-declaration of conformity by economic operators, who complete themselves so-called statements on origin.To be entitled to make out a statement on origin, economic operators will have to be registered in a database by the competent authorities of the country where they are operating their business. The economic operator will become a "registered exporter".
Rules of origin are the criteria needed to determine the national source of a product. Their importance is derived from the fact that duties and restrictions in several cases depend upon the source of imports. Rules of origin differ widely from country to country and from trade agreement to trade agreement While the requirement of substantial transformation is universally recognised, some countries or trade agreements apply the criterion of change of tariff classification, others the ad valorem percentage criterion and yet others the criterion of manufacturing or processing operation.
Rules, measures and regulations designed to protect human, animal and plant life and health, from risks arising from additives, contaminants, toxins or disease-causing organisms. They ensure food is safe for consumption.
Administrative document used in the EU for trade with non-EU countries and for the movement of non-EU goods within the EU. The SAD ensures openness in national administrative requirements, rationalises and reduces paperwork, minimises the amount of information asked for, standardises and harmonises data.
Southern African Development Community
Tariff levied on imports, defined in terms of a specific amount per unit, such as cents per kilogram. By contrast, an ad valorem duty is a charge levied on imports defined in terms of a fixed percentage of value.
Sub-Saharan Africa is, geographically, the area of the continent of Africa that lies south of the Sahara. The UN Development Program lists 46 of Africa's 54 countries as "sub-Saharan", excluding Algeria, Djibouti, Egypt, Libya, Morocco, Somalia, Sudan and Tunisia.
Refers to products that have been produced by using non-originating materials or were partially processed abroad. Rules of origin included in preferential trade arrangements contain a list which establishes, for each product, the required processing operations to be carried out in the partner country in order for the product to be considered as originating.
In an export-import context, the number of units in a consignment. The measurement used depends in the type of goods.
EU online database for customs tariffs
A tariff is a customs duty or tax levied on imports of merchandise goods. Most of the time a tariff is an ad valorem tariff (percentage of value) or a specific tariff (e.g. $100 per ton). Less often, it can be a compound tariff made up of both of these elements applies. Tariffs are mostly levied on imports, but there are cases of tariffs on exports. Tariffs raise revenue for the government and increase the prices of imported products, thus giving domestically produced products a price advantage.
Generally, it is the importer that pays the tariff. The importer declares the dutiable value of merchandise to the Customs Authority in the importing country and the final appraisal of the goods value is done by customs. Most often it is the transaction value (the price actually paid by the buyer to the seller) that serves as the basis for the value appraisal.
Notwithstanding the rules governing the multilateral trading system, developed countries may grant tariff preferences to developing economies without requiring reciprocity (under the Generalised system of preferences scheme, or on a category, regional or bilateral basis).
Belt of coastal waters extending at most 12 nautical miles from the baseline of the coast of a state, subject to its exclusive jurisdiction, as defined by the United Nations Convention on the Law of the Sea.
Requirement for goods with a preferential origin to be produced within the territory of the parties to a preferential trade arrangement, without any interruption (i.e. not leaving the territory of that party during the production process).
Series of individual agreements between the EU and Mediterranean partner countries, in relation to the Barcelona Declaration. The scope of these agreements is essentially limited to trade in goods and a number of bilateral negotiations are on-going or being prepared in order to deepen the Association Agreements.
These ongoing or future negotiations are related to further liberalisation of trade in agriculture, liberalisation of trade in services, accreditation and acceptance of industrial products and regulatory convergence.
Multilingual database integrating all measures relating to EU customs tariff, commercial and agricultural legislation. The system gives all economic operators a clear view of measures to be taken when importing goods into the EU, or exporting goods from the EU.
International Union for the Protection of New Varieties of Plants - Intergovernmental organisation with headquarters in Geneva (Switzerland), established by the International Convention for the Protection of New Varieties of Plants. It aims to provide and promote an effective system of plant variety protection, with the aim of encouraging the development of new varieties of plants, for the benefit of society.
Transit document serving both as a customs declaration and a guarantee in countries that are a contracting party to the Transport International Routier (TIR) Convention.
Provision that allows a small amount of non-originating materials to be used in the production of the goods without affecting their originating status, as long as it does not exceed a certain threshold (usually set at around 10% or 15% of the ex-work price or weight of the good, depending on the preferential trade arrangement). However, if the product specific rule already allows the use of a percentage of non-originating materials, the tolerance cannot be used to exceed that amount. The tolerance rule is also known as ‘de minimis’.
A trade barrier refers to any regulation or policy that restricts international trade, especially tariffs, quotas, licences etc.
Trade defence measures (anti-dumping, anti-subsidy and safeguard) against exports from the EU.
Comprehensive framework for customs rules and procedures in the EU customs. aiming at a paperless and fully automated customs union. The UCC entered into force on 1 May 2016, but some transitional arrangements still apply, most notably because not all of the electronic systems to deal with formalities are in place yet.
A product complies with the rule when the value of all or specific non-originating materials does not exceed a given percentage of the ex-works price of the final product.
The formula to calculate the value of non-originating materials is the following :
Regional value content of a product in FOB (%) = ((FOB - Value of non-originating materials) / FOB) x 100
“Value of non-originating materials” = the customs value at the time of importation of all non-originating materials used in the production of your product, or, if this not known and cannot be ascertained, the first ascertainable price paid for the non-originating materials in the EU or preferential partner country.
“customs value” = the value as determined in accordance with the 1994 Agreement on implementation of Article VII of the General Agreement on Tariffs and Trade (WTO Agreement on customs valuation).
“Ex-works price” = the ex-works price of the product paid or payable to the manufacturer in whose undertaking the last working or processing is carried out, provided that the price includes the value of all the materials used and all other costs incurred in the production of a product minus any internal taxes which are, or may be, repaid when the product obtained is exported.
The rule is satisfied if this value of the non-originating materials in percentage does not exceed the percentage stated in the product specific rule.
Further information on the calculation method in the EU-Japan agreement can be found in Note 4 – Calculation of a maximum value of non-originating materials in the Chapter on rules of origin of the EU-Japan Economic Partnership Agreement.
Example 1: Plastic jugs (HS heading 39.24)
In some EU trade arrangements the rule for plastic jugs (HS heading 39.24) requires:
"Manufacture [production] in which the value of all the [non-originating] materials used does not exceed 50% of the ex-works price of the product (MaxNOM 50 % (EXW))”
The manufacturer of plastic jugs uses the following non-originating materials imported from outside the EU and the partner country:
- Plastic granules (HS heading 39.03) (value 2 €)
- Lid (HS heading 39.24) (value 0.50 €).
A plastic jug (ex-works price 6 €) complies with the rule of origin because the value of non-originating materials used is less than 50% of the ex-works price.
Example 2: Skid chains (HS heading 73.15)
In some EU preferential trade arrangements the rule for skid chains (HS heading 73.15) requires:
"Manufacture [Production] in which the value of all the non-originating materials of heading 73.15 used does not exceed 50% of the ex-works price of the product (MaxNOM 50 % (EXW)”)
The manufacturer of skid chains uses the following non-originating materials imported from outside the EU and the partner country
- chain (HS heading 73.15) (value 150 €)
- wire of stainless steel (HS heading 72.23) (value 60 €)
A skid chain (ex-works price 350 €) complies with the rule of origin because the value of non-originating materials of HS heading 73.15 is less than 50% of the ex-works price of the skid chain even though the total value of all non-originating materials exceeds 50% of the ex-works price of the product.
Origin criteria in the product specific rules, according to which a product is considered sufficiently transformed in the partner country when the increase in the value of the good reaches a certain level, expressed by an ad valorem percentage.
Indirect consumption tax on goods and services levied at each point of sale, imposed at national level.
Place for storing goods. Used in particular for receiving, preparing and dispatching goods.
Goods that are exclusively produced in the territory of the party to a preferential trade arrangement, without incorporating materials from any other country. This includes plants, minerals or live animals, among other products.
World Organisation for Animal Health. International organisation that seeks to improve animal health throughout the world. The standards, directives and recommendations set out by the OIE are recognised as global references by the World Trade Organisation (WTO), in particular the agreement on sanitary and phytosanitary measures (SPS).
Intergovernmental organisation that regulates international trade between nations.
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