Provisions and concepts relating to free trade – Imports

To benefit from any beneficial tariffs in a free trade agreement, your goods must be designated as originating goods.

For goods to have originating status, the basic rule is that the goods must be wholly obtained in the country of origin or be “sufficiently worked or processed” in that country (or territory). Criteria for sufficient work or processing are listed for each product in a list that is attached to the protocols of origin, known as a processing list.

When applying for preferential tariff treatment, you need a certificate that shows that your goods have originating status.

More on forms of proof of origin.

You also need to actively claim preferential tariff treatment when submitting your customs declaration.

To be granted preferential tariff treatment for originating goods, i.e. relief from customs duty, you need proof of origin.

Proof of origin can take several forms:

• commodity certificate EUR.1, commodity certificate EUR-MED and GSP certificate form A are certificate proofs of origin
• invoice declarations, declarations of origin and statements on origin are certificates expressed as a specific working on an invoice or a commercial document.
  

The most common proofs of origin for each agreement are the following:

• invoice declarations or EUR.1 certificates, in some cases invoice declaration EUR-MED, declaration of origin EUR-MED or commodity certificate EUR-MED – for EU free trade agreements
• GSP certificate form A or statement on origin (REX) – for GSPs
• commodity certificate EUR.1 – for other unilateral arrangements.
  

Issuing entity by certificate type:

• Invoice declarations, declarations of origin and statements on origin: the exporter. The exporter must apply for authorisation from Swedish Customs to issue certificates for consignments with a value exceeding € 6000.
• Commodity certificates EUR.1 and EUR-MED: the customs authority in the exporting country. In Sweden, the Chambers of Commerce may also issue Commodity certificate EUR.1.
  

Products wholly obtained in the EU are by definition commodities or goods with a low degree of processing, such as

• timber products harvested from Swedish forests in Sweden
• meat from animals born, raised and slaughtered in the EU.
  

However, an imported, seemingly insignificant, component in a product means that it is not considered wholly obtained in the EU. An example may be pickled cucumbers that have been harvested and processed in the EU; however, some of the added spices are imported from countries outside of the EU. The cucumbers are not considered wholly obtained in the EU.

Products obtained in the EEA

When applying the EEA agreement when exporting to Norway, Iceland or Liechtenstein, it is important to consider the origin in the EEA, rather than the EU. In this context, goods wholly obtained in the EU, Norway, Iceland and Liechtenstein are considered wholly obtained in the EEA. This may include timber products from Norwegian forests that have been processed in Sweden.

Products not wholly obtained in the EU may still obtain status as originating goods. One condition is that the works performed in the EU are of such extent that the material used for the manufacture of the goods have undergone “sufficient works or processing”. The criteria for sufficient works or processing varies depending on the type of product and the country of the consignee. The specific provisions can be found in special processing lists in each agreement.

To establish the applicable rules for each product you must know its HS number, i.e. the first four numbers of the commodity code. Using these numbers, you can identify the applicable provision in the processing list.

Remember that the processing requirements in the processing lists apply to non-originating materials. If you can establish that a specific input product already has originating status, it is not required to undergo any works or processing. You are expected to demonstrate this using supplier declarations or proofs of origin.

Some measures are always considered insufficient. For example, a simple re-packing measure can never be considered sufficient to grant originating status to a product, even if the provisions in the processing list are otherwise met. Painting, cleaning or attaching a label are also not considered sufficient measures.

EEA origin for the EEA agreement
When applying the EEA agreement to exports to Norway, Iceland or Liechtenstein, you must establish EEA origin, i.e. not EU origin. Any sufficient works or processing required by the EEA agreement may be carried out in any EEA country, including EU countries.

Note that products originating in the EEA are considered to originate from the EU when exported within PEM (Pan-Euro-Med area). This also applies if the product is manufactured in e.g. Norway.

Different products have different rules of processing or origin. To find the correct rules, you need to know the product’s HS number and locate it in the list of the corresponding agreement with the country or territory with which you are trading. The list can be found using the link under the title Rules of Origin at the top of the country’s or territory’s page.

Find the list on the page of the country or territory with which you are trading (in Swedish)

Sample provisions:

• The processed product must obtain a different HS number as a consequence of the processing. In other words, the final product should have a different HS number than the material.
• The value of the non-originating material may not exceed a certain percentage of the sale price of the final product.
• The exporter should start from a specific material when obtaining the product.
  

There are usually two columns with rules of origin in the list of works or processes necessary to grant non-originating materials originating status. If there are provisions in both columns (3 and 4), the exporter may use which provision to meet. In cases where the product’s HS number is not included in the list, the exporter may instead apply the capital rule, i.e. the first rule in the chapter, which is applied to any goods not explicitly mentioned.

Cumulation allows an exporter to use input goods from multiple countries in the same free trade area to achieve originating status for a final product.

An input product is a product or part of a product used to manufacture another product. These may include raw materials, semi-manufactured products or finished components.

The proof of origin should state if an exporter has applied cumulation, and which countries are affected.

It is not necessary for a product to be wholly processed by the same country to obtain originating status. The individual processes may be carried out by different companies in the EU.

Example:
When manufacturing a shirt with Taric no. 6206, the processing requirement is that the manufacturing process in the EU should start from yarn. Gradual processing may look like this:
Company A imports yarn from a non-EU country and uses it to weave a fabric. The fabric is subsequently sold to Company B, which sews a shirt from the fabric.

Neither company has processed the product sufficiently for the shirt to be considered an originating product. However, the combination of both processes is sufficient to consider the product sufficiently processed in the EU.

Given that the fabric is not an originating goods, Company A is unable to furnish Company B with proof of origin. However, Company A may provide a supplier’s declaration concerning the processing carried out by the company. Using this supplier’s declaration, Company B may issue a proof of origin for the finished shirt.

When applying the EEA agreement, the individual parts of the manufacturing process may be carried out anywhere in the EEA. Processing carried out in the EU, Norway, Iceland or Liechtenstein may thus together form the basis for assessing the origin of the product, i.e. whether the product has been sufficiently processed in the EEA. The material in the shirt in the previous example may now be woven in any EEA country.

Supplier’s declarations are used to transfer information about the origin of a product between companies in the EU.

The supplier provides the supplier’s declaration on an invoice or, in some cases, a separate paper which is attached to the invoice. Supplier’s declarations may be issued per consignment or as a long-term supplier’s declaration.

The supplier’s declaration must state one of the following:

• that the goods have a specific origin;
• that the goods have been processed or worked to some degree in the EU.
  

Use a supplier’s declaration in the following cases:

• to certify the origin of goods purchased or sold in the EU
  as supporting evidence when issuing a proof of origin, such as Commodity certificate EUR.1 or an invoice declaration on exports;
• as evidence of the origin of goods when trading with Turkey and using the A.TR Certificate for customs union goods (since A.TR does not constitute a proof of origin).
  

Supplier’s declarations

PEM stands for pan-Euro-Mediterranean. There is a political ambition – which is to a significant degree achieved – to establish a common free trade area consisting of the EU, the EFTA states, the Faroe Islands, as well as the countries surrounding the Mediterranean and the Western Balkans. One condition for the common free trade area is identical rules of origin.

Originally, there were many separate free trade agreements between the countries in the area. Agreements with uniform rules of origin were subsequently negotiated. The next step was a common convention including all countries. Today there is a PEM convention, which contains free trade provisions. Many, but not all, countries have signed the convention. When all countries have signed the treaty, there will be a single set of rules of origin, instead of various protocols. In the long term, it will become easier to change existing provisions or adding new ones. There are ongoing efforts to simplify the rules of origin in PEM.

Thanks to PEM, goods obtained in accordance to these provisions are eligible for beneficial tariff treatment when imported to any party to the convention. Manufacturing companies may import input products with beneficial tariff treatment from all countries that apply the common provisions.

Updated matrix in the Official Journal of the EU
The European Commission publishes a matrix in the Official Journal of the European Union (OJ), C series, with information about which countries have entered trade agreements and when each agreement enters into force. All dates are included and the matrix is regularly updated.

Matrix for the pan-Euro-Mediterranean and the Western Balkans (in Swedish)

Official Journal of the European Union (OJ), C-series (in Swedish)

You need this matrix when using diagonal cumulation, which is when you include materials from one or several PEM parties. When parties other than the consignee state are involved, all parties must have mutual agreements, as well as agreements with the consignee country and the EU. Use the matrix to verify this.

When trading in PEM, the commodity certificates EUR.1 or EUR-MED, invoice declarations or invoice declaration EUR-MED are used, or declarations of origin or declarations of origin EUR-MED respectively. When using diagonal cumulation, i.e. when more than two parties are involved, commodity certificate EUR-MED, invoice declaration EUR-MED or declaration of origin EUR-MED should be used.

When trading with developing countries, you may be eligible for preferential tariff treatment via the unilateral Generalised System of Preferences. The purpose of the system is to help developing countries build their industries and exports.

The system contains three tiers of tariff preferences with different customs levels of relief for different countries and types of goods: the general GSP arrangement (country group 2020), the GSP+ arrangement with incentives contingent on good governance and sustainable development (country group 2027), and the Everything but Arms (EBA) arrangement providing duty free access for imports from Least Developed Countries (LDCs), except weapons.

You can find the applicable rate of customs duty for each country and goods in Tulltaxan (Taric). The code list shows which countries are included in each country group.

Open Tulltaxan

Statements of origin are used as proof of origin within the GSP system. The statement on origin should be drafted by a registered exporter, and thus contain a REX number. Statements on origin can also be issued without a REX number of the value of the originating goods is less than the €6,000 value limit.

The REX system was activated on 1 January 2017. GSP certificates may not be issued after 1 January 2021. Certificates issued prior to this date may be used, for a small number of countries, for as long as the certificate is valid.

The REX system is used by EU exporters in the most recent free trade agreements, such as those with the United Kingdom, Japan and Canada, as well as GSP and OCT countries. The system is used to demonstrate origin and allows the exporter to independently issue declarations of origin.

REX and statements on origin became part of the GSP system in January 2017. REX has also been used for OCT countries since 2020.

Companies exporting goods from a GSP or OCT country must be registered exporters to issue statements of origin, regardless of the value of the consignment. All registered exporters are issued a REX number and are registered in a partially public shared REX register. When importing goods from a GSP or OCT country you must verify the validity of the REX number on the statements on origin. Statements on origin can also be issued without a REX number of the value of the originating goods is less than the €6,000 value limit.

Verifying REX numbers with the European Commission.

Actors within the EU that are required to be registered exporters:

• Companies exporting originating goods to countries where REX is used in the free trade agreement, such as the United Kingdom, Japan, Canada, or GSP or OCT countries. Find out if REX is used by clicking to the relevant country from the page Provisions specific to countries and territories.
• Companies reconsigning originating goods within the EU, or to Norway or Switzerland, wishing to issue replacement statements of origin.
  

Find out if REX is used when trading with the country from which you import on the page Provisions for different countries and territories (in Swedish)

Apply to become a registered exporter (in Swedish)

Reconsigning and replacement statements of origin (in Swedish)

The EEA Free Trade Agreement is a free trade agreement comprising the European Economic Area. The EEA consists of the EU Member States, Norway, Iceland and Liechtenstein.

One of the following items must apply for goods to fall within the scope of the EEA Free Trade Agreement:

• the goods must originate in an EEA country;
• the goods must be sufficiently worked or processed in the EEA.
  

Direct transportation means that goods are transported directly from a consignor country to a consignee country. The purpose is to prevent the substitution or replacement of originating goods as they are transported to the beneficiary country.

To be eligible for several beneficial tariff treatments, you are required to demonstrate that the transportation of your goods meets the criteria for direct transportation.

While in transit, your goods may only be unloaded, reloaded and handled in a manner that preserves them in good condition. Several consignments included in a single proof of origin may not be split or merged.

Transportation via an intermediate country
Goods transported through and, in some cases, stored in an intermediate country must be transported and stored under customs supervision to be considered directly transported.

Please ensure that the consignment note applies to the entire shipment route so that you can easily demonstrate that the transportation was direct. You can also ensure that your transport undertaking is aware of the customs control requirement and voluntarily demand a certificate of customs control from the customs authority of the country of transit.

Swedish Customs and other EU customs authorities may demand that you demonstrate that the requirements for direct transportation have been met. Evidence of this may include

• a shipping documents, such as a bill of lading
• information regarding labelling or numbering of packages
• information concerning the products themselves.

Non-alteration
In some agreements, as well as the GSP regulation, the direct transportation rule has been replaced with a non-alteration provision. According to this rule, consignments may be divided or stored in an intermediary country. The goods should still be under customs control and the imported goods should be unaltered in relation to the proof of origin.

Many free trade agreements contain a prohibition against the repayment of, or relief from, customs duty for imported goods that are included in the export goods. The purpose of the prohibition is the avoidance of double benefits. In practice, this means that exporters may not issue proofs of origin for export goods obtained, for example, via inward processing.

The agreements with the following jurisdictions contain prohibitions of drawbacks: Norway, Switzerland, Liechtenstein, the Faroe Islands, Andorra, Ceuta and Melilla, Albania, Bosnia and Herzegovina, Georgia, Serbia, Montenegro, North Macedonia, Kosovo, Moldavia, Ukraine, Turkey, Israel, the West Bank and Gaza, Lebanon, Chile, Mexico, Singapore and Canada (as of 21 September 2020).

Always consider prohibitions of drawbacks when applying the PEM rules. This means that you are required to consider drawback prohibitions when applying diagonal cumulation in PEM, but not when applying the same agreement bilaterally between Algeria, Morocco, Tunisia, Egypt or Jordan, and the EU.

Please note the drawback prohibition in the agreements with Switzerland, Ceuta and Melilla, and that a drawback prohibition applies when the provisions for the new Euro-Mediterranean area (EUR-MED), except for non-originating materials, which also applies to products included in HS chapter 3 and HS number 1604 and 1605 (fish and crustaceans, molluscs and other aquatic invertebrates) of EEA origin.

There is no drawback prohibition in the agreements or preference tiers with the following countries or territories: Vietnam, Japan, United Kingdom, Syria, Honduras, Panama, Nicaragua, Costa Rica, El Salvador, Guatemala, the Cariforum States, Peru, Colombia, Ecuador, Republic of Korea, Ivory Coast, Cameroon, Eastern and Southern Africa (ESA), Pacific, South African Development Community States, ACP States, OCT States and GSP States.