As we all start to move towards active engagement with the Free Trade Agreements we are learning more and more about Rules of Origin and how they need to be recorded and evidenced for future trade. The ICC introduces the International Certificate of Origin Guidelines - the most important trade documents required by businesses, banks and customs officials to authenticate the origin of exported goods. Annually, millions of certificates of origin are issued by chambers of commerce around the world.

After Brexit, will UK goods meet the origin threshold to qualify for preferences?

Typically, for preferential origin, around 50%+ of value has to be added to claim origin. Post-Brexit, what was once European value-added will have to be separated into UK and EU value-added. That will make it harder to reach the threshold to export to the EU without tariffs.

Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders, gave one example of the challenges this poses in evidence to the Business, Energy and Industrial Strategy Select Committee.  He noted that the average car made in the UK purchases 44% of its components from UK suppliers. But the proportion of this actually made in the UK “is somewhere between 20% and 25%”, which is a long way from the 55–60% threshold needed to qualify for any FTA. Hawes has pointed out that “To move from where we currently are — let us say 20% to 25% originating content — to 60% will take many years. There is not necessarily the capability here in the UK.”

Moving forward to 2021 and beyond Certificates of Origin will become a key component to the documentation required to support both international transportation and payments.

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