What you need to know now
Shortly before Christmas, on December 24th, 2020, the European Union and the United Kingdom (UK) agreed on a trade and cooperation agreement. This also includes regulations for the free and duty-free movement of goods.
Duty-free only for goods with preferential EU origin
But anyone who thought it would now be business as usual was mistaken. With the new agreement, since January 1st, 2021, only goods with preferential EU origin can enjoy the full duty-free treatment when imported into the United Kingdom and vice versa. After all, there is immediate and complete duty-free treatment for preferential goods. This means that the duty rate for goods with preferential EU or UK origin has been zero since January 1st, 2021.
Rules and proofs of origin must be respected
The prerequisite for duty-free treatment is that the rules of origin of the agreement are complied with. In principle, companies must align their preference management in the same way as is already customary today for deliveries to preferential countries such as Switzerland, Canada or Japan. The origin system and rules also follow those of previous free trade agreements: The prerequisite for granting duty-free treatment is that the goods must either have been obtained or produced entirely within the economic area of the EU or the UK, or that they comply with the product-specific rules of origin. In terms of content, the rules of origin are strongly based on the EU's agreement with Japan, and they are quite generous overall.
As with all recent FTAs, the only possible proof of preference is a declaration of origin on a commercial document. This is the usual wording as provided in other EU trade agreements. Declarations of origin can also be issued retrospectively. With regard to the determination of preferential origin by (long-term) supplier's declarations, there is an important peculiarity. Due to the short deadline, the declarations of origin in 2021 may also be issued without existing supplier declarations. The prerequisite is that the missing supplier's declarations are subsequently available by January 1st, 2022 at the latest.
Automate preference management and save a lot of time & money
With M.SecureTrade Preference Management, Mercoline has the ideal solution for companies that export a lot of goods to the UK to reduce the additional workload that now arises to a minimum. Because with M.SecureTrade Preference Management, you not only automate the process of obtaining and issuing supplier declarations, but also create even complex preference calculations in just a few seconds. You can find more information about the solution here.
Origin of goods and preferences
Determine and verify customs-compliant preferences
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More information on the free trade agreement
The trade agreement was published in the Official Journal of the EU L444 of 31 December 2020.
Detailed information from customs can be found on the customs pages.