The origin of a product is essential for the technical customs treatment of goods that are imported into or manufactured in the European Union (EU), or for goods that are exported to third countries.  There are two definitions of the term ‘origin’: the preferential origin and the non-preferential origin.

Preferential origin

The EU has concluded trade agreements with a large number of countries and groups of countries, which provide for favorable customs tariffs. An European importer can thus, subject to conditions, use a lower customs tariff or even a zero rate when importing goods from partner countries. In addition, in some cases an European exporter can issue a (preferential origin) statement so that a customer is eligible for a reduction of the import duties payable in the country of destination.

Besides the trade agreements (bilateral arrangements), the EU also grants unilateral tariff benefits to some countries. The Generalised System of Preferences (GSP) is a unilateral arrangement that enables designated developing countries to import originating goods at a reduced rate into the EU.

Several conditions must be met in order to use this preferential system. For example, the goods in question will often have had to undergo specific treatment in the country of export, a preferential origin certificate must be submitted as proof and it is often a requirement that the goods are shipped directly from the country of export to the EU.

Non-preferential origin

The non-preferential origin is, for example, important in the application of trade policy or political measures, for origin labeling on a product or packaging, for health reasons, for anti-dumping duties or quota arrangements such as a tariff quota.

How can we help?

Assistance with establishing the preferential and non-preferential origin
Establishing the correct preferential or non-preferential origin can be quite complex and is not without financial consequences. Our customs specialists can advise and instruct you so that the rules of origin are correctly interpreted and applied.

Binding Origin Information (BOI) decision
To obtain more certainty about the origin of a good, an application for a Binding Origin Information (BOI) decision can be submitted to Customs. This BOI is valid throughout the EU for three years from the date of issue. Thanks to the extensive experience of our specialists in this area, we can estimate what the chances are of obtaining a favorable BOI. We would also be pleased to help you prepare and submit the relevant application.

More information?

Feel free to contact our customs specialists.

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Senior Manager pfennings.luc [at] kpmg.com Eindhoven

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