Goods with preferential origin status
The market conditions, under which the international trade in goods has been performed over the last months, are significantly determined by customs rules. Preferential origin status is given to exported goods in order to exercise the right of exemption from duty fee in the country of import, under the condition that the country is a member of the same customs unions as the Republic of Serbia or that those countries concluded a free-trade agreement with Serbia.
There are two set of rules used to give the preferential origin status to certain goods:
- Pan-European preferential rules of origin, which are a part of a free-trade agreement concluded with the EU and EFTA countries, Turkey and in accordance with the CEFTA 2006 Agreement
- Preferential rules of origin in compliance with the Eurasian Customs Union free-trade agreement concluded between Serbia and Russian Federation, Belarus and Kazakhstan.
The process of giving preferential status to goods depends on the set of rules. In relation to this, the required documents vary.
The enlargement of the Eurasian Economic Union (EAEU) took place on July 10, 2021 and it implied duty-free import and export of the goods made in Serbia to Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan.
At the end of last year, in December 2021, Serbia and the EU started to exercise transitional rules regarding the preferential origin of goods (in compliance with the Stabilization and Association Agreement).
The goal of the implementation of these rules is the modernization and simplification of the preferential rules of origin, which have been included in the agreements that our country signed with the Pan-Euro-Mediterranean (PEM) countries.
The novelties in PEM transitional rules refer to:
– the increase in tolerance level in terms of the use of non-originating materials, namely for the majority of agricultural products – 15% net weight and industrial products – 15% of the value of almost every finished product
– apart from the diagonal cumulation of origin, the full origin cumulation rule has been introduced (in terms of everything except from textile), which means that all operational processes performed in the countries that are included in the finished product manufacturing process are cumulated
– the direct transportation rule has been replaced by a more flexible rule, prescribing the possibility that simpler procedures, such as marking, labeling, etc., can be performed in relation to the goods stored in the country of transit
– according to the rule, the increase in or exemption from duty fee payment has been banned in relation to all products except from textile
– the issuance of certificates of origin has also been simplified because origin is proved only by the EUR.1 movement certificate; the possibility to submit EUR.1 in electronic form has also been prescribed
– the transitional rules have made some production rules, specified in the List of Working and Processing Operations, much more flexible and adjusted to the economic reality, which mostly reflects in the possibility to use non-originating materials.
Be that as it may, should you have any questions and doubts related to the preferential origin of goods, Creative Finance is here to provide you with answers.