Guest blog from Arne Mielken MIEx (Grad), Young President of the Institute of Export & International Trade
The EU has concluded negotiations for a trade agreement with Japan. It is therefore expected that the agreement will enter into force on 1 February 2019.
Recently, the EU introduced changes on the origin certification process, replacing the EUR1 certificate with REX numbers. This technical blog explains how REX and Certificates of Origin work in the context of the EU-Japan FTA. Even with Brexit coming up, it is possible that UK trade with Japan will follow a similar path, at least in the short term.
No more EUR1s
According to the EU-Japan Agreement, exporters in the EU must be registered exporters when issuing origin documentation (an origin statement) for export to Japan. EUR.1 certificates can therefore not be used, but only a statement of origin issued by the exporter in the EU to the customer in Japan.
EU companies that export to Japan, whose goods meet the conditions of origin, must apply for a license to become a registered exporter with their Customs Authority before 1 February 2019, so that the authorisation for the registered exporter is valid from 1 February 2019. If the company already has a REX number, this must be used and therefore no application need be submitted again.
Chapter 3 of the EU-Japan Agreement sets out rules of origin and procedures of origin. Appendix 3-A contains introductory notes to the product-specific rules of origin. Appendix 3-B contains the product-specific rules of origin and Appendix 3-D shows the statement on origin text set, which the exporter must publish on commercial documents in one of the allowable linguistic versions and in accordance with the laws and regulations of the country of export.
What is REX?
On January 1, 2017, an electronic system called REX was introduced, in which exporters must be registered to be able to issue declarations of origin. It applied to the GSP scheme, the EU-Canada agreement (CETA) and, from 1 February 2019, it will also apply to the EU-Japan agreement. This means, among other things:
EU companies that export to Japan must be registered in REX system in order to issue an opinion on the origin of any trade document to their customers in Japan, so that these customers can obtain preference - i.e. can import goods from the EU with reduced duty or no duty.
For trade with Japan, only the EU exporters will have to be registered in the REX system, as exporters in Japan do not use a REX system. Japan uses a "Corporate Number" instead of REX.
Companies that export to Japan must apply to become a registered exporter in order to make statements on origin, using Annex 3-D and by issuing claims of origin on the forwarding of goods to other EU countries, cf. EUTK GF Art.
The companies that already have a REX number must not apply to become a registered exporter again, as their REX number will already be automatically applied to exports to Japan. Once a company is registered once in the REX system, it applies to all other agreements that may come and which must use REX.
How to become a registered exporter
Enterprises must apply for a registered exporter's license before 1 February 2019 if the company has originating consignments of origin, the total value of which exceeds EUR 6000.
If the value of consigned originating products is below EUR 6000, the company does not need to be registered in the REX system in order to issue an origin statement to its customers in Japan.
If the company is already registered in the REX system, the company must not submit an application, as the REX number the company already has can be applied.
When the company has submitted an application to the Customs Authority, the company will then, as soon as possible, receive a license as a registered exporter.
Once your application has been processed, the customs authorities will assign the exporter or dispatcher of goods a registered exporter number (REX number) and enter the registered exporter number, registration information and the validity date of the registration into the REX system.
If you would like more information about Rules of Origin, our training course covering ‘Understanding Rules of Origin, Free Trade Agreements & Export Preference’ will give you the knowledge of how origin is established, how to complete the relevant documentation and the internal requirements to support the process.
If you have any questions about REX or exporting to Japan, you may also wish to consult our Technical Helpline: