Origin determination

Origin Determination

Origin in general

The origin of a product plays a significant role when you think of importing and exporting your goods. Origin is one of the tax bases. Basically, there are two types of origin. Origin with regards to the last country or area where the goods were in free circulation, or origin in terms of the country were the goods are manufactured. For example, a car that has been produced in Taiwan and is sold at a certain moment from the car dealer in Germany to a customer in The Netherlands. Country of manufacturing will still be Taiwan, but the country where the goods were in free circulation latest has changed from Taiwan to Germany and The Netherlands afterwards. Moreover, a country of manufacturing might change as well if a product have been processed and therefore changed. The requirements whether a product has been sufficiently processed are laid down in Free Trade Agreements between the EU and countries including the rules of origin.

Preferential and non-preferential origin

An important aspect of origin is the difference between preferential- and non-preferential origin.  If your product has a preferential status it might be possible to import the product against lower or even no import duties. The non-preferential origin doesn’t have any impact on the amount of import duties, but is important in case for example anti-dumping rates are applicable.

Challenges of determining origin

 Determining the origin when the products comes from a single source with only a few components is relatively easy. When there are many components from many origins, it gets complicated. The requirements for origin vary by country. Another challenge is to proof the origin.  If certain components were bought and re-sold several times documents are required from all these steps. If components were processed in one of these steps it gets even more complicated. Proving preferential origin always requires valid background paperwork in the exporters’ administration.

Proof of origin

 For both preferential- and non-preferential origin a proof of origin is required. For preferential origin this can be an EUR.1 certificate, an invoice declaration or the statement on origin. Claiming a lower import duty rate is only possible if the product meets the origin criteria. The specific product requirements and the processing, as well which proof of origin must be provided, can differ per country or group of countries. This is all laid down in the Trade Agreements that the EU has concluded with the countries or areas.

Know the rules, know your product, ask a consultant

In order to define the right country of origin of your product, knowledge of a specialist might be needed. Origin can be rather complex due to the specific regulations per product and per country of destination and the Free Trade Agreement. Given the duty benefits on many products having a preferential status, it is very important to know the rules and the product you would like to im- or export. Customs Support does have the right people to look at your specific situation, analyze the goods flow and determine whether a product does meet the rules of origin. Our consultants have extensive knowledge about the free trade agreements, defining the right proof of origin or applying cumulation.