Q&A: Proof of Origin
Why do we need to prove origin?
There are several reasons for the need to prove the national origin of imported goods, which can be grouped into two categories: preferential and non-preferential.
Non-preferential origin is used for the implementation of commercial policy measures, such as anti-dumping duty and tariff quotas. There are also origin marking and labelling requirements for certain goods and countries, and origin is also used for international trade statistics.
Preferential origin allows goods to be imported at a reduced or zero rate of duty. So if you’re exporting to a preference-giving country, your customer could pay less or no import duty. This only applies to countries with which we have a preferential trade agreement.
How do we define origin?
There are two categories of origin:
- Goods wholly obtained from a single country.
- This covers goods that only contain materials obtained or produced from a single country, for example, vegetables wholly originate from the country in which they are harvested, animals wholly originate from the country in which they were born and raised etc.
- Goods sufficiently worked or processed.
- This is a more complicated rule for defining origin but, essentially, goods which are comprised of materials from outside the EU could be granted EU origin if they have undergone a substantial manufacturing process within an EU country.
There are two different ways to determine if goods have been sufficiently processed in the EU:
- How much value has been added through the process?
- How has the tariff code changed from the components to the final product?
This means that, provided the requirements for sufficient process are met, your products can be sold as EU origin goods even if the component materials are not of EU origin. Tariff codes define the nomenclature and duty rates applied to your goods, so a change in tariff heading will change how the goods are treated by HMRC.
How do we prove origin?
If your goods meet all the requirements for EU origin, you will need to provide proof to the importing country. Depending on whether the importing country can take preference or not, there are different forms of proof of origin:
- EUR-1 certificate – this states that your goods are of EU origin and allows the importer to take preferential import duty rates.
- ATR certificate – similar to an EUR-1, this allows preferential duty rates on imports and exports between the European Community and Turkey.
- Invoice declaration by the exporter – this allows preferential duty rates to be taken by the importer, but can only be used by Approved Exporters with a customs authorisation number.
- Certificate of Origin – this states that the goods are of EU origin, but does not allow any preferential duty rates to be taken by the importer. It is used for non-preferential origin.
Exporter Services can provide all of the above certificates through our links with UK Chambers of Commerce and we also provide assistance with applications for Approved Exporter status. If you would like to find out more about any of the above, please give us a call or fill out the contact form on our contact page.