Efta Colombia - Rules of origin and customs

1. Rules of Origin and Customs issues
A key to using the EFTA – Colombia Free
Trade Agreement
Trade Promotion
Seminar
1
Ralf Aeschbacher
Directorate General of Customs, Switzerland
and
Johann Freyr Adalsteinssn
Directorate of Customs and Excise, Norway
1

2. 26 December 2017
Focus
• Rules of origin
– The framework for preference
• Verification/enforcement procedures
Trade Promotion
Seminar
2

3. 3
Rules of Origin - why?
Preferential treatment is limited to goods
• originating in the parties to the Agreement; or
• in a non party, provided that they have
undergone sufficient working or processing in
a party
Market accessRules of Origin

4. Trade Promotion
Seminar
4
Rules of origin in the EFTA-Colombia FTA
Article 2.3
Rules of Origin and Mutual Administrative Assistance
in Customs Matters
1. The provisions on rules of origin and customs
procedures are set out in Annex V
(Rules of Origin and Mutual Administrative Co-
operation in Customs Matters).
[….]
4

5. Trade Promotion
Seminar
6 December 2017
Important Appendices to the RoO Annex
• Appendix 1 – Introductory Notes to the List
• Appendix 2 – List of working and processing
• Appendix 3a – Movement Certificate EUR.1
• Appendix 3b – Origin Declaration
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6. Trade Promotion
Seminar
66 December 2017
5
Rules of origin
The rules of origin:
• determine the criteria on how a product must be
manufactured in order to obtain status as an ”originating
product” – being eligible for preferential tariff treatment
• regulate the quantities of non-originating materials that
may be used in the production and/or how such materials
must be worked or processed in order to obtain
preferential status for the final product
6

7. Trade Promotion
Seminar
76 December 2017
Origin Criteria
Main principles
1) Autonomous origin
Wholly obtained products
Sufficiently worked or processed products
2) Origin by means of accumulation
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8. 8
Wholly obtained

9. Trade Promotion
Seminar
96 December 2017
Origin criteria - Sufficiently worked or
processed
• Conditions in the List (Product Specific Rules)
• General tolerance rule of 10 % of ex-works value
(except for textile products in Chapters 50 – 63 where the rule is
10% of the products weigt)
• Insufficient working or processing – (minimal operations)
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10. 10
Sufficiently worked or processed
Nationalisation of the product
(except minimal operation)
Value added
criterion
Specific criterion
(e.g. textiles)
Change of tariff
heading

11. Commodity Code - 8 digits
(Pizza containing sausage, meat of edible meat offals)
The first 6 digits are incorporated
in the HS (Harmonized System)
1 9 . 0 5 . 9 0 1 0
Heading
Subheading
Duty Statistical
Trade Promotion
Seminar
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Chapter

12. Trade Promotion
Seminar
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Origin criteria - List Rules
HS
Classification
Product
Description
Applicable Rule
12

13. Example
Export product from Colombia: facial
cream HS 33.04
Input materials:
• Paraffin (HS 27.12, origin EU)
• Cocoa butter (HS 18.04, origin
Colombia)
• Essential oil ( HS 33.01, origin China)
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14. List rule for HS 33.04
6 December 2017 14

15. Example
Export product from Colombia:
chocolate HS 18.06
Input materials:
• Cacao beans (HS 18.01, origin
Colombia)
• Sugar (HS 17.01, origin Brazil)
• Milk powder ( HS 04.02, origin
Switzerland)
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16. List rule for HS 18.06
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17. Trade Promotion
Seminar
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Accumulation
”Free use" of originating materials:
• The "originating materials" from the EFTA-Colombia FTA
parties used do not need to fulfil a rule laid down in the
list of processing rules.
• Minimal operations (art. 6) determine whether country of
origin changes.
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18. 18
Accumulation
CO
IS
CH
NO
CO
> Minimal Operation

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Seminar
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Direct Transport
Transport through third countries (e.g. EU) is allowed,
provided that goods do not undergo operations other than:
• Unloading, reloading and splitting-up of
consignments
• operations to preserve the product in good
condition
• remaining under customs control
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20. Trade Promotion
Seminar
20
Import requirements
• Customs clearance according to domestic requirements
• Presentation of proof of origin according to domestic
laws and regulations
• Preferential tariff treatment according to the FTA
• Possible control and verification of proof of origin
6 December 2017 20

21. Trade Promotion
Seminar
21
Proofs of origin
• Movement Certificate EUR.1 normally endorsed
(stamped) by the "Dirección de Impuestos y Aduanas
Nacionales – DIAN"
• Origin Declaration issued by the exporter. However with
a value limit of USD 8'500.-, unless being an “approved
exporter”.
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22. 22

23. Trade Promotion
Seminar
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Text of origin declaration
"The exporter of the products covered by this document (authorisation No. …)
declares that, except where otherwise clearly indicated, these products are of …
preferential origin.
"El exportador de los productos incluidos en el presente documento (autorización
no…) declara que, salvo indicación en sentido contrario, estos productos gozan
de un origen preferencial … .
………………………………………….................................................................
(Place and date)
...……..…………………………………………….................................................
(Signature of the exporter, in addition the name of the person signing the
declaration has to be in clear script)
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24. The customs authorities may authorise any exporter,
who makes frequent shipments of originating
products to make out origin declarations irrespective
of the value of the products concerned.
An exporter shall offer all guarantees necessary to
verify the originating status of the products as well as
the fulfilment of the other requirements of this
Convention.
Approvedexporter (1/2)
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25. The customs authorities may grant the status of approved
exporter subject to any conditions.
The customs authorities shall grant a customs
authorisation number which shall appear on the origin
declaration or on the origin declaration.
The customs authorities shall monitor the use of the
authorisation.
The customs authorities may withdraw the authorisation at
any time.
Approvedexporter (2/2)
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26. The verification system
is based on
mutual trust
Verification procedures
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27. Customs Administration
exporting country
check at the
exporter's site
Customs Administration
importing country proof
of
origin
Customs Administration
exporting country
request
for
verification
proof
of
origin
result
of
verification
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28. Trade Promotion
Seminar
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Responsibilities of the
issuer of a proof of origin
The issuer of a proof of origin shall:
• make the necessary indications / information and
prove that these indications are correct, and
• keep for at least three years (depending on the FTA)
all documents proving the originating status of the
exported products.
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29. Trade Promotion
Seminar
29
Rights of the customs authority
of the exporting country
The customs authority has at any time the right to:
• ask for information;
• inspect exporters accounts, commercial papers,
documents and the manufacturing process; and
• verify the accuracy of the proof of origin at any time
and without prior announcement.
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30. Proof of Origin issued wrongly
Possible consequences
• withdrawal of the authorisation of approved exporter
• EFTA importer requests that customs duties to be paid
by exporter
• loss of customers/trade opportunities
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31. Summing up:
• Product coverage
• Origin criteria (Convention, PSR)
• Principle of territoriality
• Transport rule/ Direct transport
• Proofs of origin
• Importation requirement
• Verifications
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32. ¿ ¿ ¿ Preguntas???
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