CEFTA announces transitional rules of origin

CEFTA announces transitional rules of origin

The transitional rules on the preferential origin of goods are applied to the CEFTA PartiesEFTA Parties, along with the rules of the Pan-Euro - Mediterranean PEM Convention. During the revision of the PEM Convention, most of the PEM contracting parties, including CEFTA PartiesEFTA Parties, EU and EFTA, decided to allow companies to benefit from the modernized and simplified rules of origin, and started application of transitional rules on a bilateral basis.

The new rules are more flexible to reduce administrative burden, and therefore make trade simpler, give more opportunities and enable companies to become more competitive in other markets.

The internal procedures are finalized by all CEFTA PartiesEFTA Parties and will come into force on 1 February 2023.

The Parties will be able to increase their export competitiveness by applying the revised, more flexible and modern rules. The Director of the CEFTA Secretariat Emir iki said that the PEM Convention was an international agreement that aims at establishing a unique set of rules on the origin of goods, simplifying the determination of the origin of goods, and allowing trade in CEFTA and the EU.

The PEM Contracting Parties started a discussion on revising the Convention in 2013 in order to adapt it to the economic reality.

Since the adoption of the revised Convention failed in 2019, the majority of the Contracting Parties decided to apply the revised rules in advance. The two sets of rules, the original PEM rules of origin and the transitional rules, will be applied in parallel, and economic operators will be able to choose between the applicable rules.

This new step that CEFTA is taking is to reduce the administrative bureaucracy and increase the volume of trade.

The rules provide for several simplifications including :

More flexible tolerance rules: Increase of the share of non-preferential materials in finished goods from 10% to 15% on the basis of net weight for agricultural products, while for textile products the tolerance is set to 15% of non-originating materials based on the ex-works price of the final product;

EUR. A 1 or origin declaration will suffice for a period of 10 months instead of 4 months, and it will suffice for a period of 10 months.

The options to agree on the application of a system of registered exporters and the use of proof of origin that is issued and or submitted electronically are also foreseen.

The possibility of duty drawback and full cumulation as benefits of the transition rules have been implemented in the CEFTA since 2019.