Reduced or zero customs duties require the goods to satisfy the rules of origin under the applicable preferential agreement.
Holding a certificate or statement of origin is not always enough to secure the operation.
Evidence can be checked after importation
Article 64 of the Union Customs Code provides that tariff preferences depend on compliance with the rules of origin under the relevant agreement.
The French Customs notes that evidence takes different forms depending on the agreement: EUR.1 certificate, statement or declaration of origin, the REX system or importer’s knowledge.
During an audit, the authorities may nevertheless seek to verify that this evidence reflects the actual manufacturing process.
Article 61 of the UCC allows customs authorities, in particular, to require additional supporting evidence where the declared origin is in doubt.
The product’s origin must be traceable
For significant or recurring trade flows, retaining only the document presented at customs clearance is therefore insufficient.
The evidence supporting preferential origin must be retrievable:
- the identity and origin of suppliers;
- the materials or components used;
- the tariff classification of products and components;
- manufacturing stages and locations;
- the values needed for calculations where the origin rule uses a threshold;
- supplier declarations and other traceability records.
The assessment depends on the agreement and product: a change of tariff heading, a maximum percentage of non-originating materials, a specific processing operation or a combination of criteria.
What happens if the evidence is challenged?
Evidence of origin may undergo post-release verification. Some agreements provide for cooperation between the authorities of the importing and exporting countries.
If originating status cannot ultimately be established, preferential treatment may be refused and the corresponding customs duties claimed.
The risk is especially significant where a business relies entirely on a supplier’s statement without the evidence needed to assess its consistency.
Where the origin of a product or manufacturing arrangement raises particular difficulty, Binding Origin Information (BOI) can also help establish the operator’s position in advance.
If audited today, could the business demonstrate why each product actually qualifies for the preferential origin claimed?
Would you like to secure the preferential origin of your goods, or are you facing a challenge to your evidence of origin? Contact the firm.