RULES OF ORIGIN

„Origin is the economic nationality

of goods“
 CUSTOMS HISTORY
customs supervision and checking goods within the
import, export and transit procedure;
collection of tax and duty; fight against smuggling;
supervision of compliance with trade regulations of
the prohibitions and restrictions;

Protection
Fees Barrier
Duties
Fees Taxes
restrictions
Duties
Prohibitions Fees
 MODERN CUSTOMS
appropriate balance between effective control for ensuring
protection, security and prevention of fraud, and the
facilitation of legitimate trade
Advance Risk Electronic
enhancing
economic Ruling management Customs
competitiveness
Pre-arrival
IPR clearance

One stop Post-clearance

shop audit
Separation of Release
from final
PREFERENTIAL
determination of Duties &
TREATMENT
Customs duties, taxes, Taxes
fees and charges; Simplified National
procedures Protection
Single
Trade facilitation measures (environment,
Window
for authorized operators health, safety,
CITES, Ex/Im of
sensitive
 Origin of goods becomes more and more
important tool in facilitation of international
trade.
 European Union have concluded numerous
agreements with trade content, which gave
economic operators (both Importers and
exporters) the possibility to adapt their
export/import strategy in order to save
costs and better respond to market
demand.

TRADE FACILITATION &

ORIGIN
• The preferential origin allows development of FTA parties
by using their production potential, facilitating of trade
with originated goods within the FTA and opens new
possibilities for international cooperation, among others
through cumulation established in the rules of origin
• Correct usage and unified interpretation of rules of
origin is important step towards European integration
and facilitation of trade.
Goals:
- economic growth
- economic diversification
- the reduction of poverty

PREFERENTIAL ORIGIN
 STATUS OF GOODS:
1. Wholly obtained

2. Imported from other countries and RELEASED for free

circulation

3. Obtained in the customs territory from 1and/or 2

STATUS VS. ORIGIN

STATUS VS. ORIGIN

 „made in Japan“
 Released for free circulation in the EU
 EU STATUS
 ORIGIN?
 STATUS VS. ORIGIN

ORIGIN REMINDES „JAPAN“

STATUS ≠ ORIGIN
ORIGIN

NON-PREFERENTIAL ≠ PREFERENTIAL
NON-PREFERENTIAL ORIGIN

Purposes:
all kinds of commercial policy measures
 Anti-dumping duties
 Countervailing duties
 Trade embargoes
 Safeguard & retaliation
Trade statistics
Quantitative restrictions
Tariff quotas
Public tenders
Origin marking („MADE IN“)

NON-PREFERENTIAL ORIGIN
Rules of non- preferential origin

 Wholly obtained or produced

goods
 "Last substantial transformation
rule"
Proof of non-preferential origin
CERTIFICATE OF ORIGIN

NON-PREFERENTIAL ORIGIN
The Chamber should certify the origin based on information received
from an importer that the Chamber is able to verify. For this purpose,
the Chamber is making a series of checks:
 Checking that formal undertakings are held
 Checking that documents submitted for certification have been
signed by one of the applicant's authorized signatories
 Face-checking of documents to ensure correctness of
completion in terms of required content
 Checking the supporting evidence to ensure the accuracy of the
information declared on the documents for certification.
The exporter is obliged to provide the Chamber with information
and accurate documents necessary for determination of non-
preferential origin. At the same time, exporter is fully responsible for
accuracy of information and documents provided to the Chamber
as a background for certificate of non-preferential origin.

ISSUING PROCEDURE
TARIFF PREFERENCE
Reduced/removal rates of duty
Goods have to satisfy origin rules
-To help the development of industries in
the Parts of agreement
- Make difficult use the non-originating
goods in the trade between the Parts

PREFERENTIAL ORIGIN
 Preferences based on origin of product

 Unilateral or reciprocal preferences

 Agreements (reciprocal)
 Autonomous arrangements (unilateral)
 Customs Unions - based on customs status

PREFERENTIAL ORIGIN
Originating products:
1. Wholly obtained
2.Cumulation
3.Sufficiently worked or processed

PREFERENTIAL ORIGIN
 WHOLLY OBTAINED

 Mineral products extracted from their soil or

seabed;
WHOLLY OBTAINED

 Vegetable products harvested there;

WHOLLY OBTAINED
 live animals born and raised there;
 products from live animals raised there;
WHOLLY OBTAINED
 products obtained by hunting or fishing
conducted there;
WHOLLY OBTAINED
 products of sea fishing and other
products taken from the sea
outside the territorial waters by
their vessels;
products made aboard their factory ships
exclusively from products taken by their vessels
(see also last picture)

WHOLLY OBTAINED
 used articles collected there fit only for
the recovery of raw materials, including
used tires fit only for retreading or for use
as waste;

WHOLLY OBTAINED
WHOLLY OBTAINED
 waste and scrap resulting from manufacturing
operations conducted there;
products extracted from marine soil
or subsoil outside their territorial
waters provided that they have
sole rights to work that soil or
subsoil;

WHOLLY OBTAINED
 WHOLLY OBTAINED

 goods produced there exclusively from

the above mentioned materials
 INSUFFICIENT WORKING OR PROCESSING
OPERATIONS DO NOT CONFER ORIGINATING STATUS TO PRODUCTS
 (f) husking, partial or total bleaching, polishing, and glazing of cereals and rice;
 (g) operations to colour sugar or form sugar lumps;
 (h) peeling, stoning and shelling, of fruits, nuts and vegetables;
 (i) sharpening, simple grinding or simple cutting;
 (j) sifting, screening, sorting, classifying, grading, matching; (including the
making-up of sets of articles);
 (k) simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or
boards and all other simple packaging operations;
 (l) affixing or printing marks, labels, logos and other like distinguishing signs on
products or their packaging;
 (m) simple mixing of products, whether or not of different kinds;
 (n) mixing of sugar with any material;
 (o) simple assembly of parts of articles to constitute a complete article or
disassembly of products into parts;
 (p) a combination of two or more operations specified in (a) to (n);
 (q) slaughter of animals.

MINIMAL OPERATIONS (1)

RELEVANT TO NON-ORIGINATING MATERIALS
PROBLEMS:
 Concept „ SIMPLE“
 All operations carried out in the exporting Contracting Party on
a given product shall be considered together when
determining whether the working or processing undergone by
that product is to be regarded as insufficient

MINIMAL OPERATIONS (1)

RELEVANT TO NON ORIGINATING MATERIALS
Question! Is this minimal operation (MO) ?
We have to know the origin of the watch strap
a) Watch strap was imported from USA (MO)
b) Watch strap was made in FYROM (more than MO)
IT DOES NOT MEAN THAT IT HAS PREF. ORIGIN
EXAMPLE OF MINIMAL OPERATION
No proof of origin

MINIMAL OPERATIONS (1)

RELEVANT TO NON-ORIGINATING MATERIALS
 MINIMAL OPERATIONS (2)
RELEVANT TO ORIGINATING MATERIALS

125€

EUR-1

100€
EUR-1
WORK+PROFILE
EU
EUR-1 5€
ORIGIN
20€

VALUE ADDED CRITERION

BOUNDARY VALUE FOR A CITERION TO THE ALLOCATION OF
ORIGIN WITHIN A CUMULATION ZONE
 Expand the „originating zone“ by
considered materials originating in
partner countries as originating in the
country
 Allow producers to use imported
originating materials from partner's
country without risk of changing the
origin

CUMULATION
 EUR-1 „FYROM“
OPERATION
„MORE
THAN MINIMAL“

Material: EUR-1 „EU“

BILATERAL CUMULATION
RELEVANT TO ORIGINATING MATERIALS
DIAGONAL CUMULATION
RELEVANT TO ORIGINATING MATERIALS

EUR-1 „BiH“ EUR-1

„FYROM“

EUR-1 „EU“

1. OPERATIONS „MORE THAN MINIMAL“

2. AGREEMENT BETWEEN PARTIES

PROVIDING DIAGONAL CUMULATION
 - EU
- EFTA
- Montenegro
- BiH
- FYROM
- Turkey
- Albania
- Serbia
- Kosovo
- Moldova

PAN-EURO-MED CONVENTION &

STABILISATION AND ASSOCIATION
PROCESS
Cumulation can be only applied if the countries of manufacture and of final
destination have concluded free trade agreement, containing identical rules
of origin, with all the countries from which all the materials used originate.

Materials originating in the country which is not part of an agreement with

the countries of final manufacture and of the final destination shall be treated
as non-originating.

PAN-EURO-MED VARIABLE
GEOMETRY
PAN-EURO-MED VARIABLE
GEOMETRY MATRIX (OVERVIEW)
https://eur-lex.europa.eu/legalcontent/EN/TXT/PDF/?uri=OJ:C:2017:073:FULL&from=EN
 Optional use of certificates EUR.1 and EUR-MED
A movement certificate EUR.1 or EUR-MED can be issued when the
products are originating in the exporting country or in any other
country of agreement other than Turkey and CUMULATION HAS
NOTBEEN APPLIED.

Mandatory use of the movement certificate EUR-MED

A movement certificate EUR-MED must be issued when the products are
originating either in the exporting country or in any of the other country of
agreement and cumulation with Faroe Islands or any of the Mediterranean
countries other than Turkey HAS BEEN APPLIED.
PAN-EURO-MED PROOFS
OF ORIGIN
PAN-EURO-MED PROOFS
OF ORIGIN
Mandatory use of the movement certificate EUR.1
A movement certificate EUR.1 must be issued when
conditions for diagonal, pan-Euro-Mediterranean
cumulation of origin are not satisfied. This happens
when the prohibition of drawback was not respected, as
it is allowed in some bilateral agreements with
Mediterranean countries
or
In case of full cumulation with Morocco, Tunisia and
Algeria
 FULL CUMULATION
RELEVANT TO NON-ORIGINATING MATERIALS
SPECIFIC FOR CERTAIN PROTOCOLS, e.g. EEA,
MAGHREB...
„CUMULATION OF PROCESSING“
20% 20% 20%

+ +
EUR-1 „EU“

VALUE 100%NON 80%NON 60%NON 40%NON/60%ORIGIN

supplier's declaration

CRITERION:
Manufacture in which the value of all the
(non-originating) materials used does
not exceed 40 % of the ex-works price
of the product
CUMULATION (1)

EUR-1 EUR-1 EUR-1

ø MINIMAL MORE THAN MINIMAL

EUR-1
EUR-1 „EU“ EUR-1
„EU“ VALUE ADDED „BiH“
or CRITERION

EUR-1
„BiH“
TO BE CONTINUED ...
 - FOAM RUBBER
CUTTING+LABELING+PACKAGING

EUR-1
100€

130€ EUR-1
?????

CUMULATION
ORIGIN

EXAMPLE 1
 CUMULATION CEFTA
EXAMPLE 2

125€

EUR-1

100€
EUR-1
supplier's declaration WORK+PROFILE
?????
5€
ORIGIN
20€

WATCH STRAP MADE IN BiH FROM WHOLLY OBTAINED CALF

LEATHER
 CUMULATION CEFTA
EXAMPLE 3
IN THE EU, THERE IS NO TARIFF PREFERENTIAL SCHEME
FOR THE EU ORIGINATING GOODS =>NO PREFERENCES!

125€

EUR-1

100€
EUR-1
WORK+PROFILE
EU
EUR-1 5€
ORIGIN
20€

THE FULL RATE OF DUTY

WILL BE PAID
SUFFICIENT WORKING OR
PROCESSING
RELEVANT TO NON-ORIGINATING MATERIALS

ø M.O. MORE THAN M.O. ‘SUFFICIENTLY

PROCESSED’
}

EUR-1
NOT PREFERENTIAL ORIGIN „FYROM“
EUR-1
 Products obtained in the Party
incorporating (non-originating)
materials which have not been wholly
obtained there, provided that such
materials have undergone sufficient
working or processing in the Party
 Products shall considered to be
sufficiently worked or processed
when the conditions set out in the list
in Annex II of Protocol are fulfilled.

SUFFICIENT WORKING OR
PROCESSING
GENERAL RULES
 SUFFICIENT WORKING OR
PROCESSING
CHANGE OF TARIFF HEADING RULE
9401

 WOOD 4403

GLUE 3506 EUR-1

„
SUFFICIENT WORKING OR
PROCESSING
CHAGE OF TARIFF HEDINGS
SUFFICIENT WORKING OR PROCESSING
PERCENTAGE RULE

9401
 PARTS OF SEATS
9401
35€

GLUE 3506 EUR-1

5€ 100€ „
SUFFICIENT WORKING OR
PROCESSING
PERCENTAGE RULES
 Smoking pipes
9614

ROUGHLY-SHAPED
BLOCKS

EUR-1
„BiH“
SUFFICIENT WORKING OR
PROCESSING
PROCESS RULE
 allows a certain percentage of non-originating
materials to be used without affecting origin of
final product

 their total value does not exceed 10 % of the ex-

works price of the product;

SUFFICIENT WORKING OR
PROCESSING
VALUE TOLERANCE RULE
 any of the percentages given in the list for the
maximum value of non-originating materials are
not exceeded through of the application of this
rule
 this rule shall not apply to products falling within
Chapters 50 to 63 of the Harmonized System
(Section XI - Textile)

SUFFICIENT WORKING OR
PROCESSING
VALUE TOLERANCE RULE
 NON ORIGINATING
MATERIALS ≤ 10%
NOT of SECTION XI
ø M.O. M. than M.O. ‘SUFFICIENTLY
PROCESSED’
and
}

NOT BEYOND EUR-1

SUFFICIENT
EUR-1 WORKING OR “ %” RULES OF
ANNEX II
„FYROM“

PROCESSING
VALUE TOLERANCE RULE
SUFFICIENT WORKING OR
PROCESSING
VALUE
 CORN
TOLERANCE RULE
MAIZE (corn)
1005
35€ STARCH 1108

425€
ORIGINATING OR NON-ORIGINATING GOODS?
(IF SO, WHICH ORIGIN?)

9401
 PARTS OF SEATS
9401
45€

GLUE 3506 ?
5€ 100€ EUR-1
Annex I to the protocol
Note 6.2:
 materials, which are not classified within
Chapters 50 to 63, may be used freely in the
manufacture of textile products, whether they
contain textiles.

INTRODUCTORY NOTES (3)

MORE THAM MINIMAL
OPERATION
NO WHOLLY OBTAINED YES EUR-1 ‘
NO

YES
ORIGINATING VALUE TOLE
MATERIALS SUFFICIENTLY
NO NO RANCE
ORIGINATING CUMULATION PROCESSED
RULE (10%;NO
MATERIALS CEFTA/EU/TR… SECTION XI)
CUMULATION

YES
YES
CEFTA/EU/TR… NO Ø
‘NO DRAWBACK’ YES
YES

RULE

NO
(IN CASE OF
INWARD NO
EUR-1 PROCESSING) Ø

YES
ADDED VALUE
CRITERION
EUR-1

ORIGIN DIAGRAM
 PART OF NORMAL EQUIPMNET OF VEHICLE…

ACCESSORIES, SPARE PARTS AND TOOLS

 WHOLE BOX…100 €
BiH ORIGIN INCLUDING
NON-ORIGINATING
SHAVER……….. 15€
SHAVER
‘MADE IN USA”
15€
EUR-1
„BiH“

SETS
 FUEL

ENERGY

MACHINES
&TOOLS
NEUTRALPLANT
ELEMENTS
&
EQUIPMENT
GOODS WHICH DO NOT ENTER AND WHICH ARE NOT INTENDED
TO ENTER INTO FINAL COMPOSITION OF THE PRODUCT.

DIATOMACEOUS EARTH DIATOMITE FILTER

CLEANING BY

H2SO4

NEUTRAL ELEMENTS
NEUTRAL ELEMENT
ORIGINATING OR NON-ORIGINATING GOODS? (IF
SO, WHICH ORIGIN?)

PAINT WORK+DRILL A
HOLE
PARTS OF A PIPE 9614

EUR-1
?????
 SMOKE PIPE
FINE WOOD 9614

EUR-1
?????
ORIGINATING OR NON-
ORIGINATING GOODS? (IF SO,
WHICH ORIGIN?)
 CUSTOMS PROCEDURES WITH ECONOMIC
IMPACT

 INWARD-PROCESSING PROCEDURE
- DRAWBACK SYSTEM (???)
- SUSPENTION SYSTEM

DRAWBACK OR EXEMPTION
 DUTY RATE 18%

EU SUBJECT HAVE
TO PAY DUTY FOR
NON-ORIGINATING
MATERIAL
EUR-1 18%
“EU”

DRAWBACK OR EXEMPTION
DRAWBACK OR EXEMPTION
SUSPENTION SYSTEM (1)

NOT DUTY 18%

EU SUBJECT DOES NOT
BECOUSE OF I.P./S.S. NEED
TO PAY DUTY
BECOUSE OF PREFERENTIAL
EUR-1 ORIGIN
“BiH”

INWARD PROCESSING (I.P.)

WHERE IS THE DUTY FOR NON-ORIGINATING RAW MATERIAL?

DRAWBACK OR EXEMPTION
SUSPENTION SYSTEM (2)

EU SUBJECT
NOT DUTY 18% ENJOYED
BECOUSE OF I.P./S.S. BENEFITS OF
PREFERENCE

EUR-1
“BiH”ONLY IF THE
EXPORTER PAID
IMPORT DUTY
(18 %) FOR
NON-ORIGINATING
RAW MATERIAL
INWARD PROCESSING (I.P.)
 DRAWBACK OR EXEMPTION
SYSTEM OF DRAWBACK

EU SUBJECT
PAID DUTY 18% ENJOYED
WAITING FOR REFUND BENEFITS OF
PREFERENCE
EUR-1
“BiH”ONLY IF
DUTY (18 %) FOR
NON-ORIGINATING
RAW MATERIAL
WAS NOT REFUNDED

INWARD PROCESSING (I.P./D.S.)

DRAWBACK OR EXEMPTION
SCHEDULE OF STEPS
NON-ORIGINATING
INWARD PROCESSING
MATERIALAS

SUFFICIENT WORKING
OR PROCESSING

SUSPENSION SYSTEM DRAWBACK SYSTEM

NO REFUND THE IMPORT

COLLECTING of DUTY FOR
DUTY
NON-ORIGINATING
MATERIALS
EUR-1 or
INVOICE DECLARATION
DRAWBACK OR EXEMPTION
EXAMPLE (1)
8411
Duty rate 3,2%
20 000EUR 8803
8802 Duty rate 2,7%
Duty rate 7,7% 10 000 EUR
10 000 EUR

I.P./S.S.
EUR-1? 100 000EUR
EXW
DRAWBACK?
DRAWBACK OR EXEMPTION
EXAMPLE (1.2)

 STEP ONE: IT IS AN ORIGINATING GOODS?

 STEP TWO: WHICH OF USED RAW MATERIALS

WE HAVE TO COLLECT DUTY AND WHICH RATE?

7,7% 3,2% 2,7%

CONDITIONS SAME AS IF IT
WAS RELEASED TO FREE
CIRCULATION
 DRAWBACK OR EXEMPTION
EXAMPLE (2)
7326
Duty rate 2,7%
5€

6505
Duty rate 5,7%
150€

9505
I.P./D.S.
CARNIVAL HAT
200€
EXW
MINIMAL OPERATION MADE ON TWO NON-PREFERENTIAL GOODS
DUTY WILL PAY EU IMPORTER
DRAWBACK OR EXEMPTION
EXAMPLE (2)

7326
(*)S.D.
PIN “MADE IN BiH”
5€
STEEL IN INGOTS
(*)S.D. 6505
7224
Duty rate 5,7%
150€

9505
I.P./D.S.
CARNIVAL HAT
200€
EXW (*) SUPPLIER‘S DECLARATION
DRAWBACK OR EXEMPTION
EXAMPLE (2.1)

OPERATION MORE THAN MINIMAL?

THE DUTY (5,7%) FOR NON-ORIGINATING RAW MATERIAL

HAS NOT BEEN REFUNDED

EUR-1
DRAWBACK OR EXEMPTION
EXAMPLE (3)

 Undress doll 9503

Duty rate 4,7%
1€

9503 (*)S.D. 9503

Duty rate 4,7% Duty rate 4,7%
EUR-1 1€
6€ 9503
DOLLY
I.P./S.S.
10€
EXW
 OPERATION MORE THAN MINIMAL?

COLLECTING OF DUTY FOR NON ORIGINATING MATERIAL – 4,7%

DRAWBACK OR EXEMPTION
EXAMPLE (3) EUR-1