EU-UK TCA: Rules of Origin and what Traders must comply with from 1st Jan 2022
Updated: Jan 7
From 1st Jan 2022, and as outlined in our previous blog, exporters and importers will need to be in a position to provide enough proof of origin of the manufacturing country for the foods the are shipping, and HMRC may also now ask traders for evidence for goods shipped during 2021.
We have been receiving more and more queries about ‘proof of origin’ in recent weeks, so we thought we could give you a refresher on what origin is and some of the new requirements for 2022. As the largest provider of export documentation services in the North of England, did you know exporters using our EUR1 Certification Services for preferential market access have traded over £197,2million from April to Nov 2021? Not only that, the Chamber has also supported exporters with certification of commercial invoices (self-certification for origin or other) and non-preferential Certificates of Origin worth over £300,8million. Rules of origin are one of the most important trading requirements you need to understand and meet if your business buys or sells goods internationally. These rules 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 nil or 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 under the TCA, goods will be exempt from paying any Customs Duty when imported into the UK or EU. The current TCA works under the principle of bilateral cumulation, which traders need to understand if they are importing and then re-exporting goods between the UK & EU with or without goods going through any significant transformation in one or the other.
So what is origin?
By 'origin' we mean where goods (or the materials, parts or ingredients used to make them) have been grown, produced, or manufactured. It is not where the goods have been shipped or bought from. Rules of origin are not the same for all types of goods. Different kinds of goods face different rules and specifications, called product-specific rules, so you need to check the individual rules for your goods.
How to prove the origin of goods traded between the UK and EU
To benefit from preferential tariffs, the rules of origin requirements in the TCA must be met for: • goods imported into the UK from the EU, and • goods imported into the EU from the UK.
UK and EU importers will need to have one of the following proofs of origin:
• a statement on origin that the product is originating, made out by the exporter • the importer’s knowledge that the product is originating.
You can find more information about how to prove the origin of goods you trade between the UK and EU on GOV.UK.
New requirements for supplier declarations from 1 January 2022
For some goods, the exporter may also need to hold supplier declarations. Supplier declarations are documents that your supplier provides to you, that help you establish whether the goods you’re exporting meet the product-specific rules of origin. These are needed as supporting evidence to confirm the origin of the goods, when the manufacture alone is not enough to meet the product specific rules of origin.
From 1 January 2022, if you make out statements on origin for goods you export to the EU, you must have supplier declarations (where needed) at the time you export your goods.
Between 1 January and 31 December 2021, you have been allowed to export goods to the EU using preferential tariffs without supplier declarations, as long as you were confident that these goods met the rules of origin. This was to allow you more time to get your supplier declarations afterwards. This temporary easement will end on 31 December 2021 and you must hold supplier declarations for goods you’ve exported this year.
If you cannot provide a supplier declaration, or other suitable evidence, to confirm the UK origin of goods you exported to the EU between 1 January and 31 December 2021, you must let your EU customer know.
If you’re asked to verify the origin of your goods and you can’t provide this supporting evidence:
your EU customer will be liable to pay the full (non-preferential) rate of Customs Duty,
you may be charged a penalty, and
you may be excluded from using preferential tariffs going forward.
For more information about Rules of Origin and proof of origin, check our Brexit Hub - Rules of Origin Section for more in-depth guidance from the UK government and the EU.
Need further support?
Training Courses: From rules of origin to step by step UK CoO and EUR1 workshops, please check our upcoming courses here or if you require a bespoke course, email us at email@example.com for more information.
Export Documentation Services: Our experienced team can help you issuing preferential and non-preferential certificates of origin and other documents including EUR1s, UK C Certificates of Origin, Commercial Invoices, Packing list and more.
Rules of Origin/Proof of Origin Compliance Audit: Unsure if you have enough evidence and it is its compliant? Book an online or face to face audit with one of our team’s experts by emailing us at firstname.lastname@example.org
Do you simply have a question or series of questions regarding rules of origin, proof of origin or other? Why not use our Bespoke Advice or Bespoke consultancy packages?
For further information please contact the team at email@example.com
Source: HMRC, GMCC