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International Trade – April 2021

RULES OF ORIGIN – A SPANNER IN THE WORKS?

Rules of Origin (RoO) are putting a spanner in the works for UK exporters wishing to take advantage of the UK’s newly negotiated trade deals with the EU and all trade deals we had within the EU that have been rolled over. The new trade agreements only allow goods of UK origin to move tariff and quota free. Many UK exporters, from a variety of sectors, are finding that goods they thought they could export tariff and quota free do not meet the new origin rules, putting their goods at a disadvantage compared to their EU competitors. The rules define which goods can be counted as originating in the UK and therefore benefit from the negotiated agreements.

So, why do we have RoO? RoO are written into all trade agreements to ensure that reduced tariffs and other non-trade barriers covered by the agreement are only available to goods originating in the countries that have signed the agreement. If we did not have RoO then companies could just import goods into a country that has a trade deal with the country they want to trade with then just export the goods from that country even though the country that originally sent the goods does not have a deal with that country. For example, a US company wants to export to the EU, but the US and the EU do not have a trade deal. Without RoO the US company could export the goods to the UK and then on to the EU, taking advantage of the UK EU trade deal.

The rules vary for each commodity code, though in general if 50% of the ex-works price is considered as originating in the UK then the goods would be considered to be of UK origin. For goods wholly originating in the UK this is not an issue but with modern supply chains parts come from all over the world. When we were a member of the EU parts from EU counted towards the origin of the goods and in some agreements they still can as long as they are processed in some way in the UK. This is called cumulation and is included in some format in most trade agreements. The issue UK businesses are having at the moment is that cumulation can only apply if the goods are processed and there is a list of minimal processes which do not change the origin of the goods. For example, if Norwegian salmon is imported into the UK and then repackaged for the consumer market, then repackaging is considered a minimal process which does not confer origin, so the goods remain of Norwegian origin. If the same Norwegian salmon is imported into the UK and is smoked and then repackaged for the consumer market, then the salmon may be considered of UK origin.

These rules will have the effect of curtailing the UK from being a distribution centre for EU goods. It may make UK manufacturers look for UK suppliers to replace their existing EU suppliers, but EU manufacturers face the same issue so may well replace their UK suppliers. In short, RoO are an added barrier to trade that many UK exporters have not needed to consider before.

Throughout the British Chamber of Commerce network, we are seeing regular examples that demonstrate to our members that not all goods can move tariff and quota free between the UK and the EU. Supply chain changes will be inevitable for some UK businesses to remain competitive.

Article written by British Chambers of Commerce

International Trade workshops

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For further information on any of the above workshops please call our training department on 01329 242420 or email train@hampshirechamber.co.uk

Updates/Latest News:

EU Exit Update

The Border Operating Modelupdated March 2021
A guide to how the border with the European Union will work click here for further information

Declare commercial goods you’re taking out of Great Britain in your accompanied baggage or small vehicles
Find out how to declare goods you’re taking out of Great Britain to sell or use for your business that are under the total value of £1,500 and meet certain other conditions click here for further information

Sending goods to the EU through roll on roll off ports or the Channel Tunnel
Find out what to do if you use roll on roll off locations or the Channel Tunnel to transport goods to the EU from the UK click here for further information

EU business: importing from the UK
Find out what EU businesses need to do to import from the UK click here for further information

Webinars on trading with the EU
Webinars giving an overview of the new rules that have come into place since leaving the EU customs union and the EU Single Market click here for further information

Check if you can declare goods you bring into Northern Ireland not ‘at risk’ of moving to the EU
Find out if goods you bring into Northern Ireland are not ‘at risk’ of moving to the EU such that EU tariff will not be due on those goods click here for further information

Apply for authorisation for the UK Trader Scheme if you bring goods into Northern Ireland
Find out how to get authorised to declare goods you bring into Northern Ireland not ‘at risk’ of moving to the EU so that EU duty will not be payable on those goods click here for further information

Rules of origin for goods moving between the UK and EU from 1 January 2021 goods 
The rules of origin requirements for the most important provisions that your business needs to understand and comply with, under the UK’s deal with the EU – click here for further information

Get proof of origin for your goods
If you’re using a preference from a preference agreement or the Generalised Scheme of Preferences, you will need to prove the origin of your goods – click here for further information 

Using a suppliers’ declaration to support a proof of origin
Supplier declarations are where your UK supplier provides you with information needed to prove the origin of your goods for preferential rates of duty between the UK and other countries – click here for further information

Check duties and customs procedures for exporting goods
Find information about how to move goods from the UK to the rest of the world – click here for further information

Check your goods meet the rules of origin
Rules to establish the country of origin of imported and exported goods and to help identify those which qualify for lower or nil Customs Duty – click here for further information

Claiming preferential rates of duty between the UK and EU from 1 January 2021
How to claim preferential rates of duty on goods covered in the UK’s deal with the EU and how to declare goods imported into the UK on your import declaration – click here for further information

Check if you can claim a preferential rate of duty
If you import or export using a preference agreement or the Generalised Scheme of Preference, you may be able to reduce the duties on your goods – click here for further information

ICC’s Incoterms® rules are the world’s essential terms of trade for the sale of goods and the revised publication, Incoterms® 2020, is in stock at Hampshire Chamber of Commerce.

To purchase your copy please contact the international trade team on tel: 01329 242420 or click here 

Foundation Award in International Trade

Hampshire Chamber can now offer the Foundation Award in International Trade, a qualification assessed by British Chambers of Commerce.

To receive the award candidates need to attend and pass assessments from 6 of the international trade training workshops on offer.

These workshops are replicated 3 times during the year.   Certificates are provided for each module passed.

For more information or to book your workshops email train@hampshirechamber.co.uk or call Ben McDonald on 01329 242420

Dates for your Diary:

CUSTOMS DECLARATION TRAINING WORKSHOP – Tuesday 27th April 2021
For further information and to book please click here or contact Jackie Highmore via email jacqueline.highmore@hampshirechamber.co.uk

Roundup of news:

Export to Japan – helping your company do business in Japan click here for further information

The demand is out there.  You should be too.

The UK market might seem big enough for your business. But thinking bigger pays off. Borders needn’t be blockers. Let us help you grow beyond them.  Click here for further information

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