The European Union (EU) has a number of preferential trade arrangements
with countries and groups of countries outside the EU. These arrangements
provide for particular goods originating in the countries concerned
to be imported into the EU and entered to free circulation at reduced,
or nil rates of customs duty.
Countries and groups of countries receiving
EU preferences include Turkey, Cyprus, Malta, Israel, the Faeroe
Islands, Andorra, Poland, Hungary, the Czech and Slovak Republics,
Romania, Bulgaria, Slovenia, the Baltic States, the European Free
Trade Association (EFTA), the Generalised System of Preferences
(GSP), the African, Caribbean, Pacific states (ACP), Maghreb states
(Algeria, Morocco, Tunisia), Mashraq states (Egypt, Jordan, Lebanon,
Syria), Overseas Countries and Territories (OCT) and the Occupied
Territories of the West Bank of the River Jordan and Gaza Strip.
It is important to note that in order
to qualify for the preferential rate of customs duty goods must
have originating status. To achieve originating status, goods must
be either "wholly produced", or have undergone "sufficient
transformation".
What constitutes sufficient transformation
varies according to the tariff heading of the goods. However, a
very general rule is that goods must change tariff heading in the
course of a process in the country claiming preference. The various
preference agreements also provide for certain other conditions
and rules, which cover documentation, direct consignment and export
relief.
It should be noted that although the
EU grants preferential arrangements to all the above countries,
only a few of these countries grant preference to EU goods. Countries
which grant preferences to EU goods are said to have reciprocal
trade agreements. The EU has reciprocal trade agreements with Iceland,
Liechtenstein, Norway, Switzerland, Cyprus, Israel, Malta, Ceuta,
Melilla, the Canary Islands and some ACP and OCT states. Goods originating
in the EU can be imported into these countries at reduced or, nil
rates of duty. If an importer in one of these countries wishes to
claim preference, the exporter in the EU must provide a preference
document, such as a Form EUR 1, or an invoice declaration. These
documents and declarations give details of the goods being exported
and certify that they are originating.
However, before issuing such a preference
document, the EU exporter must hold evidence to show that the goods
meet the relevant rules of origin. If you export goods supplied
from another firm you must get evidence from the supplier, in the
form of a specially worded Supplier's Declaration, that the goods
meet the origin rules.
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