UK exporters have been given a year’s grace period on certifying the origin of components that make up their manufactured goods.
This Rules of Origin waiver is part of the UK’s trade deal with the EU (the ‘Trade and Cooperation Agreement’) which came into force on 31 December at 11pm GMT (12 midnight CET).
The deal took effect at the same time as the UK formally left the EU Customs Union and Single Market, becoming a ‘third country’ in trade and customs terms.
Customs checks began taking place on goods movement between the EU and UK in the early hours of this morning (Friday 1 January).
Rules of Origin meaning
Rules of Origin determine the economic nationality of a good and are often a key component of FTAs signed between countries – see the IOE&IT’s handy guide to Rules of Origin here.
Under the UK-EU trade agreement, companies will be able to self-certify the origin of their goods and where the processing takes place will also count towards this.
For example, an electric car made in the UK can be traded tariff-free even if a significant proportion of it was built using components imported from around the world.
Another trade deal easement is the year-long waiver for UK manufactuers on completing Rules of Origin certification for parts sourced outside the EU.
It is outlined in new government Rules of Origin guidance, downloadable from here.
The guidance says that “for both goods imported from the EU to the UK and goods imported from the UK to the EU, until 31 December 2021, traders also do not need supplier’s declarations from business suppliers in place at the time the goods are exported”.
Key trade deal aim
In trade talks with the EU over the past 10 months, Rules of Origin were a key focus for UK negotiators keen to avoid disrupting UK industries with complex supply chains, in particular car manufacturing.
More than 85 per cent of the cars made in the UK are exported, with the EU the biggest single market.
In their negotiations, UK officials aimed to keep post-transition car manufacturing in England viable for Japanese giants Toyota and Nissan, especially for their respective electric car marques.