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In order to help the export trade of the EC, trading agreements with certain countries have been set in place. These allow originating exports from the EC to enter the destination country at a reduced or nil rate of duty. These arrangements are not in place with every country – the destination country has to be a signatory to a preferential trade agreement.
In order for exported products to qualify, they must have EC preferential origin and therefore have met the required origin rule.
The rules vary according to the product and the preferential trade agreement concerned. They require either that the product is wholly produced in the preference country or that it has been manufactured there in accordance with particular rules.
There are two different ways to declare preferential origin. The most commonly used is a EUR 1 Certificate (ATR Certificate for goods exported to Turkey under the EC’s Customs Union arrangements with that country - see Notice 812 European Community Preferences: trade with Turkey for details of that arrangement and the special conditions which goods must meet in order to benefit from the non-payment of duty). There is also a facility in most agreements to use a declaration on the invoice with a legally approved form of words as an alternative. This can either be a low value declaration available to any exporter or one for Approved Exporters where no value limit applies.
EUR 1 Certificates have to be stamped by:
• HM Revenue & Customs Central Processing Unit, Custom House, Furness Quay, Salford M50 3XN
• a local Chamber of Commerce or local Office of the Chartered Institute of Shipbrokers
prior to being despatched to your overseas customer.
When an exporter presents a EUR 1 for authorisation, the accuracy of the claim will be checked by the issuing office. It may ask for evidence in order to ensure the origin rules have been met. HM Revenue & Customs may also be required by the receiving country to verify origin up to three years after the issue of the certificate. Therefore, you must retain for a minimum period of three years evidence to support the origin of the goods.
If a request for verification from the authorities in the receiving country is made, and it is found that the goods were not entitled to preference, customs have to report this fact to the requesting authority. This will result in your customer having to pay the full Customs Duty, which in turn could affect your future trade.
Also, there is the possibility of a penalty being imposed, so it is important that you ensure prior to export that certificates are issued only when all the conditions are met and all appropriate evidence is held.
More guidance on the specific rules can be found in:
If you require any further assistance you can contact the Excise and Customs Helpline on Tel 0300 200 3700.