{"id":3086,"date":"2022-01-12T09:30:05","date_gmt":"2022-01-12T08:30:05","guid":{"rendered":"https:\/\/www.airtimecritical.com\/?p=3086"},"modified":"2024-02-20T12:16:39","modified_gmt":"2024-02-20T11:16:39","slug":"preferential-origin-reduced-customs-duties","status":"publish","type":"post","link":"https:\/\/www.airtimecritical.com\/en\/preferential-origin-reduced-customs-duties","title":{"rendered":"Preferential origin and reduced rates of duty"},"content":{"rendered":"

All you need to know about preferential origin and reduced rates of duty<\/strong><\/span><\/h2>\n

Preferential origin <\/strong>is an agreement that confers imported goods a reduced or zero rate of duty<\/strong>. Through this arrangement, products imported from a third country (outside the European Union) can benefit from the preferential agreements.<\/span><\/p>\n

Preferential origin is established through free trade contracts<\/strong> or economic and financial partnerships between the<\/strong> EU and third countries<\/strong>. Each agreement is governed by a protocol specifying the conditions that determine whether goods have preferential origin. A crucial point is to consider all the steps that lead to the acquisition of the final product, as well as the countries involved at each manufacturing stage. Indeed, if preferential origin is advantageous for the importer, it is not a given for all imported goods<\/strong>.<\/span><\/p>\n

The benefits for a European manufacturer<\/strong><\/span><\/h3>\n

Preferential origin allows a European manufacturer to claim a reduced or zero rate of duty<\/strong> on all eligible imports. These preferential import rates constitute a significant competitive advantage <\/strong>for a European company. Reduced duty on imports automatically enables a company to make higher<\/strong> profit margins<\/strong> than another which does not avail itself of this arrangement and pays the full rate of duties.<\/span><\/p>\n

In addition, once preferential origin has been determined, the European importer will be able to claim the preferential rate for each new import from the partner country. This effectively gives the European importer a lasting competitive edge<\/strong>.<\/span><\/p>\n

What goods are eligible?<\/strong><\/span><\/h3>\n

Only goods originating from a beneficiary country are eligible for this preferential rate. Imported products must also fulfil the conditions laid out in the agreement<\/strong> negotiated between the EU and the exporting country. Accordingly, imported goods must be manufactured from raw materials originating from a beneficiary country. <\/strong>If that is not the case, the goods must have undergone some working or processing in the beneficiary country.<\/span><\/p>\n

A set of rules specifies the various transformations that a manufactured product must have undergone to be considered \u201coriginating\u201d. The \u201clist rules\u201d set the amount of working or processing <\/strong>required on non-originating materials for them to obtain originating status.<\/span><\/p>\n

List of beneficiary countries<\/span><\/h3>\n

Preferential origin is available to countries or country groups that have concluded preferential agreements with the European Union<\/strong>. These customs union agreements give rise to a reduced or nil rate of duty.<\/span><\/p>\n

Here are a few countries benefiting from the preferential agreement:<\/strong><\/span><\/p>\n