Page 6 - Industrial Technology EXTRA - Brexit Briefing

BREXIT BRIEFING

Unravelling the rules of

origin for manufacturers

The agreement of a trade deal between the UK and EU will have come as an enormous
relief to manufacturers, but the new rules of origin represent somethng of a maze. Here,
ANDREW THURSTON, customs duty consultant at MHA Macintyre Hudson, navigates us
through the detail of these complex rules that manufacturers will need to understand

The trade agreement between the UK and
EU has introduced new rules for exporters of
goods, with a requirement to retain
satisfactory evidence of origin. This is
something that’s additional that companies
who manufacture goods or send goods
across the border will need to have in place,
which they might not have the facility to do
at the moment.

The agreement allows for both UK and EU
goods to be counted as inputs from the other
party when assessing the origin of goods.
Full bilateral cumulation will be applied, as
was expected as part of the trade deal. So
where goods are purchased, for instance,
from Germany, to be incorporated into a UK
finished product, provided there is sufficient
processing carried out, these can be
included as inputs for determining the origin
of the goods for UK purposes. They can then
be re-exported back into Europe as UK-
originating goods.

Determining origin
To determine origin, you first need to know
the first six digits of the tariff heading of the
particular product. If you don’t know that,
you need to refer to the customs tariff.
Although in most cases it is only four digits
that are needed, there are circumstances
where you’ll need to go to the 6-digit heading
to determine the rule of origin.
There are some exceptions where the rules
There are two conditions that determine of origin set a maximum limit on the value of EXAMPLE 1: FOOD AND BEVERAGE
origin, and it depends on the type of goods: non-originating materials, or where some l Fruit smoothie produced in the
wholly produced or sufficiently transformed. tariff headings allow a qualifying process to UK using fresh fruit from around
Wholly produced goods are those which are be carried out, even though some or all of the world, seasonally sourced
grown or dug up from the ground in a the parts have not changed tariff heading. u HS code: 2009
member state of the EU. The term thus u Origin rule: CTH, provided that the total
applies mainly to products which occur Certain processes are said to be minimal and weight of non-originating materials of
naturally and to goods made entirely from therefore cannot be used as sufficient headings 17.01 and 17.02 used does not
those products. production. These include: exceed 40% of the weight of the product
l Preserving operations to make sure that l Rule requires all non-originating raw
Products outside of these food and the products remain in good condition materials to change tariff heading
agricultural sectors are classified under during transport and storage l However, any non-originating sugar
sufficient production). There has to be some l Breaking up and assembly of packages content must not exceed 40% of the weight
sufficient transformation of the raw materials l Washing, cleaning, removal of dust, l If the above is met, then the finished
to qualify, with the finished product classified oxide, oil, paint or other coverings product is a UK originating product
under a different 4-digit tariff heading. l Simple paining and polishing operations

6 WINTER 2021 – INDUSTRIAL TECHNOLOGY EXTRA