Preferential treatment of goods based on origin

The duty levied on goods may be lower than the valid general customs duty or not levied at all (0% rate, or zero duty) if the imported goods originate in a specific country.

It must be possible to prove the origin with a proper proof of origin. Preferential treatment must be requested with a customs declaration (preferential treatment codes and document codes). Reduced duty rates are referred to as preferential treatment.

From which countries can you import and receive preferential treatment?

In the attachment about preferential proof of origin upon import (in Finnish), the groups of countries listed in addition to individual countries, namely GSP, OCT and ACP/EPA states, include almost 200 countries. The countries and areas included in these groups are listed in the Commission’s TARIC database. The GSP group includes, among others, Pakistan and India.

Most of the countries in the world are covered by the various EU systems of preferential tariff treatment. Only around 20 countries are completely outside these systems (incl. the United States, Russia, Belarus, Saudi Arabia, Australia, Taiwan and Hong Kong).

What is required for obtaining preferential treatment?

  1. The imported product is covered by the relevant agreement. For example, sensitive agricultural products have often been excluded from agreements.
  2. The product must originate in an agreement country (beneficiary country). Each preferential treatment arrangement mentions which conditions the product being produced or manufactured in the country must meet in order to be considered as originating (so-called rules of origin).
  3. The product must be imported directly from the beneficiary country to the EU (so-called condition of direct transport). However, direct transport is not mandatory for, for example, products originating in the Euro-Mediterranean partnership area which are transported within the area.
  4. The origin of the product must be proven with an appropriate proof of origin, for imports from GSP countries (developing countries) a registered exporter’s statement on origin. The EUR.1 goods certificate is used upon imports from other preferential countries.
  5. Origin can also be proven with a standardised exporter’s declaration included in the invoice (invoice declaration or declaration of origin). Only the declaration of origin (invoice declaration) is used upon imports from Korea and Canada.
  6. When importing goods from Japan and the UK, preferential origin can also be proven using so-called ‘importers knowledge’, which means a declaration made by the importer on the origin of the product. When using importer’s knowledge, the exporter’s statement on origin is not needed. Read more under Points to consider.

The certificates of origin used in import for preferential treatment are listed according to country and country category in the attachment about preferential proof of origin upon import (in Finnish). The validity (4, 5, 10 or 12 months) of the proofs of origin is also indicated in the list.

Preferential treatment according to preferential tariff agreements may involve various additional conditions relating e.g. to derogations from the rules of origin (preferential treatment quotas and special entries on proofs of origin). Import certificates or certificates of quality and authenticity are required for certain agricultural products.

Points to consider

The country of origin is the country where the goods are from i.e., were they were produced or manufactured.

If goods have undergone manufacturing or processing in at least two countries, the country of origin is the country where the last significant and economically motivated manufacturing or processing was performed and which resulted in a new product. For example, packaging, sorting and other comparable small scale handling is not considered manufacturing.

However, the dispatching country is entered as the country of origin in accordance with the statistical directives in the following cases:

  • the country of origin is not known (and cannot be established)
  • returned goods and other goods originating in the Union
  • goods belonging in chapter 97 of the customs tariff
  • after outward processing (nature of transaction stating codes 51, 52 or 53 in box 24) for imported goods.

The exporter must prove the origin of the goods with a proof of origin. Proofs of origin include statements on origin and origin declarations, which are made out using a standard wording in a specified format.

Examples of the proofs of origin under different free trade agreements:

Statement on origin according to the EU-UK free trade agreement

(Period: from……………………………….to ………………………. (1))

The exporter of the products covered by this document (Exporter Reference No………………………… (2)) declares that, except where otherwise clearly indicated, these products are of ………………………….. (3) preferential origin.

.............................................................................................................................................................................................. (4) (Place and date)

.............................................................................................................................................................................................. (Name of the exporter)

 

  • If the statement on origin is completed for multiple shipments of identical originating products within the meaning of point (b) of Article 56(4) of this Agreement, indicate the period for which the statement on origin is to apply. That period shall not exceed 12 months. All importations of the product must occur within the period indicated. If a period is not applicable, the field may be left blank.
  • Indicate the reference number by which the exporter is identified. For the Union exporter, this will be the number assigned in accordance with the laws and regulations of the Union. For the United Kingdom exporter, this will be the number assigned in accordance with the laws and regulations applicable within the United Kingdom. Where the exporter has not been assigned a number, this field may be left blank.
  • Indicate the origin of the product: the United Kingdom or the Union.
  • Place and date may be omitted if the information is contained on the document itself.

 

Statement on origin according to the EU-Japan free trade agreement

 

 (Period: from ......................................................................... to.........................................................................(3))

 The exporter of the products covered by this document (Exporter Reference No .............. (4)) declares that, except where otherwise clearly indicated, these products are of ........................................................................ preferential origin (5).

(Origin criteria used (4))

............................................................................................

(Place and date (5))

………………………………………………………………………………………..

(Printed name of the exporter)

............................................................................................

 

  • If the statement on origin is completed for multiple shipments of identical originating products within the meaning of subparagraph 5(b) of Article 3.17, indicate the period for which the statement on origin will apply. That period shall not exceed 12 months. All importations of the product must occur within the period indicated. Where a period is not applicable, the field can be left blank.
  • Indicate the reference number through which the exporter is identified. For the European Union exporter, this will be the number assigned in accordance with the laws and regulations of the European Union. For the Japanese exporter, this will be the Japan Corporate Number. Where the exporter has not been assigned a number, this field may be left blank.
  • Indicate the origin of the product; the European Union or Japan.
  • Indicate, depending on the case, one or more of the following codes;
    • "A" for a product referred to in subparagraph 1(a) of Article 3.2;
    • "B" for a product referred to in subparagraph 1(b) of Article 3.2;
    • "C" for a product referred to in subparagraph 1(c) of Article 3.2, with the following additional information on the type of product specific requirement actually applied to the product;
    • "1" for a change in tariff classification rule;
    • "2" for a maximum value of non-originating materials or a minimum regional value content rule;
    • "3" for a specific production process rule; or
    • "4" in case of application of the provisions of Section 3 of Appendix 3-B-1;
    • "D" for accumulation referred to in Article 3.5; or
    • "E" for tolerances referred to in Article 3.6.
  • Place and date may be omitted if the information is contained on the document itself.

 

Origin declaration according to the transitional rules of origin of the pan-Euro-Mediterranean (PEM) area and the PEM Convention

 

Please note: If the new transitional rules of the PEM area that entered in force on 1 September 2021 have been used when determining the origin of the goods, you should enter the text “according to the transitional rules of origin” after “(2) preferential origin” as shown below. If you leave out this text, the rules of the current PEM Convention will be applied to the goods.

The exporter of the products covered by this document (customs authorization No ........................... (1)) declares that, except where otherwise clearly indicated, these products are of………………………………. (2) preferential origin (*according to the transitional rules of origin).

*If the new transitional rules of origin of the PEM area have been applied in determining the origin of the product, the exporter must indicate this at the end of the origin declaration as shown above. If the rules of origin of the PEM Convention have been applied in determining the origin, this text is left out or, correspondingly, the text “according to the PEM Convention rules of origin” entered instead.

..............................................................................................................................................................................................(Place and date) (3)

..............................................................................................................................................................................................

(Signature of the exporter, in addition the name of the person signing the declaration has to be indicated in clear script) (4)

 

  • When the origin declaration is made out by an approved exporter, the authorisation number of the approved exporter must be entered in this space. When the origin declaration is not made out by an approved exporter, the words in brackets shall be omitted or the space left blank.
  • Origin of products to be indicated. When the origin declaration relates in whole or in part, to products originating in Ceuta and Melilla, the exporter must clearly indicate them in the document on which the declaration is made out, by means of the symbol ‘CM’.
  • These indications may be omitted if the information is contained on the document itself.

 

Origin declaration according to the EU-South Korea free trade agreement

 

The exporter of the products covered by this document (customs authorisation No……………………….. (1)) declares that, except where otherwise clearly indicated, these products are of ………………….…… (2) preferential origin.

..................................................................................................… (3)

(Place and date)

..................................................................................................… (4)

(Signature of the exporter, in addition the name of the person signing the declaration has to be indicated in clear script)

  • When the origin declaration is made out by an approved exporter, the authorisation number of the approved exporter must be entered in this space. When the origin declaration is not made out by an approved exporter, the words in brackets shall be omitted or the space left blank.
  • Origin of products to be indicated. When the origin declaration relates, in whole or in part, to products originating in Ceuta or Melilla, the exporter must clearly indicate them in the document on which the declaration is made out by means of the symbol ‘CM’.
  • These indications may be omitted if the information is contained on the document itself.
  • In cases where the exporter is not required to sign, the exemption of signature also implies the exemption of the name of the signatory.

When claiming preferential treatment for an originating product based on importer’s knowledge, the importer has a particular responsibility for the information. The claim for preferential treatment must always be based on information that is in the possession of the importer before the claim for preferential treatment is made. With this information, the importer must be able to prove, on Customs’ request, that the goods are regarded as originating products under the agreement’s rules of origin. If Customs wishes to verify the origin of the products after their release, the verification only concerns the importer and the evidence in the importer’s possession. The exporter or the authorities of the export country are not required to participate in the post-release verification process. 

What information can Customs demand from the importer?

If the preferential treatment has been granted based on importer’s knowledge, the importer may be asked to provide information for a post-release verification detailing the manufacturing process of the products, the acquisition prices of materials and the acquisition countries. The importer must make sure they have the required information when applying for preferential treatment. 

If Customs asks for information, the importer must submit it within three months of the date of Customs’ request for information. If Customs subsequently asks for additional information, it must also be submitted within three months. If the importer does not respond to Customs’ request for information within the time limit, or does not provide sufficient details for verifying the origin of the product, the preferential treatment may be denied. Furthermore, once preferential treatment has been sought based on importer’s knowledge, it is not possible to claim it again based on a statement origin, even if the exporter makes out such a statement for the importer.

The exporter in the exporting country draws up a declaration of origin for the buyer in the EU. The exporter draws up this standard form declaration of origin in the commercial document that is related to the export consignment containing originating products and where the originating products have been sufficiently specified to identify them.

The exporter must have a decision on approved exporter authorisation issued by Customs if the value of the originating goods in the consignment exceeds 6,000 euros. Approved exporters must include the number of their authorisation in the declarations of origin they draw up. As for exports from Canada, the exporter provides its business number on the origin declaration, no separate authorisation or authorisation number is required.

Any exporter can draft a declaration origin if the value of the originating products in the export consignment does not exceed 6 000 euros. In such cases, the declaration of origin must bear the original signature of the exporter.

You can request Customs to revise the customs clearance decision so that the full duty (so-called third country duty) already levied is changed into a preferential duty. The change will also affect the amount of VAT levied.

You can request preferential treatment on the customs declaration as well as a specific time limit for presenting the proof of origin after the import. Note that a guarantee will also be reserved.

You can request preferential treatment in the customs declaration. You should provide the preferential treatment codes in the goods item details of the declaration, and the code of the origin document as an additional document.

  • Code list CL603 Preferential treatment
  • Code list CL013G Additional document – goods item level 

You can check the preferential origin of goods in the commodity code service Fintaric. 

If you are lodging a declaration for a simplified declaration procedure, you should provide a customs treatment code (code list 0017) instead of the preferential treatment code, and the customs system (code list 0127). A simplified declaration procedure is, for example, a customs declaration made by entry in the declarant’s records (EIDR).

The EU has customs union agreements with Turkey, San Marino and Andorra.

Imports from Turkey

1. Imports of industrial products from Turkey to the Union are, as a rule, duty-free trade within the customs union. The relief from customs duty can be obtained provided that 

  • the goods have been in free circulation in Turkey before being exported to the Union
  • the importer presents to Customs an A.TR. movement certificate obtained from the exporter.

The following details must be provided in the import declaration: 
Declaration type IM
Customs procedure code 40XX
Additional procedure code F16
Preferential treatment code 400
Goods item additional document (A.TR. movement certificate) type N018 and description “ATR”

2. The origin rules of the free trade agreement between Turkey and the Union are applied to basic agricultural products classified under HS chapters 1–24, as well as coal and steel products (ECSC). To obtain preferential treatment for these products when importing them to the EU, you must provide proof of their origin using an EUR.1 movement certificate or an invoice declaration.
 
Details to be provided in the import declaration:
Declaration type IM
Customs procedure code 40xx
Additional procedure code 999
Preferential treatment code 300

3. Products that do not meet the requirements in the customs union agreement or the requirements for originating products in the free trade agreement will be subject to the general customs duty rate. 

Details to be provided in the import declaration:
Declaration type IM
Customs procedure code 40xx
Additional procedure code 999
Preferential treatment code 100

Imports from San Marino

1. In the trade between San Marino and the Union, goods are granted exemption from customs duty based on the customs union agreement without proof of origin. . The goods trade encompasses all the goods categories except products falling within the scope of the Treaty establishing the European Coal and Steel Community. The goods are exempted from duty provided that they are either
a) produced or manufactured in San Marino or in the EU territory, or
b) produced or manufactured elsewhere, but cleared for free circulation in San Marino or the EU territory.

The following details must be provided in the import declaration: 
Declaration type IM 
Customs procedure code 40XX
Additional procedure code F16
Preferential treatment code 400 

2. Goods not covered by the customs union agreement are subject to the general duty rate.

The following details must be provided in the import declaration: 
Declaration type IM
Customs procedure code 40XX
Additional procedure code 999
Preferential treatment code 100 

Imports from Andorra

Preferential treatment for goods imported from Andorra to the EU is obtained based on either the customs union agreement or the free trade agreement.

1. Goods belonging to HS chapters 25–97 will be exempted from customs duty based on the customs union agreement between Andorra and the Union. No proof of origin is required. 

The following details must be provided in the import declaration:
Declaration type IM
Customs procedure code 40XX
Additional procedure code F16                                                                                           Preferential treatment code 400 

2. Agricultural products belonging to HS chapters 1–24 will be exempted from customs duty based on the origin rules of the free trade agreement. The products must be accompanied by proof of their preferential origin in the form of either an EUR.1 movement certificate or an invoice declaration.

The following details must be provided in the import declaration: 
Declaration type IM 
Customs procedure code 40XX
Additional procedure code 999
Preferential treatment code 300 

3. Products that do not meet the requirements laid down in the customs union agreement (HS chapters 25–97) or the free trade agreement (HS chapters 1–24) will be subject to the general customs duty rate. 

The following details must be provided in the import declaration:
Declaration type IM
Customs procedure code 40XX
Additional procedure code 999
Preferential treatment code 100 

The origin declared for the product in the proof of origin can be checked afterwards in the country where the proof of origin was issued. If the origin of the goods declared upon import and proven with a proof of origin is proven false in a post-clearance audit, full customs duties must be paid for the product with post-clearance. It can also be checked if the authority who endorsed the certificate of origin has had the competence to do so. The authenticity of the certificate of origin can also be examined (fake certificates).

When importing products from third countries, in certain situations a so-called general certificate of origin must be presented (non-preferential origin). Such certificates are generally issued by chambers of commerce in different countries. Preferential treatment is never granted based on a general certificate of origin, unless there are separate provisions on it concerning certain special products.