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Preference Duty Rate Between UK and EU,U S A and Canada

March 23, 2024

 

How to claim preferential treatment under the Trade and Cooperation Agreement

The Trade and Cooperation Agreement's Origin Procedures (Articles 37 to 67) describe how commodities can prove their originating status and how to apply for a tariff preference, which is a lower rate of customs duty.

What is the EU-UK Trade and Cooperation Agreement?

The EU-UK Trade and Cooperation Agreement was entered into by the EU and the UK, and it entered into force on May 1st, 2021. An unprecedented 100% tariff liberalisation was agreed upon by the United Kingdom and the European Union. This resulted in the movement of goods produced in the UK or EU not being subject to tariffs or quotas. 

Originating Status

The Agreement establishes zero tariffs or quotas on trade between the UK and the EU where goods meet the relevant rules of origin. The UK and EU have agreed rules of origin, which businesses need to understand and meet to obtain a preference duty rate. To be considered originating and qualify for a reduced rate of Customs Duty:

 

1. Products must be sufficiently worked on or processed within the countries in the agreement.

2. Products must be exclusively obtained or produced in the territory of one country without using materials from any other country.

HM Revenue and Customs (HMRC)

HMRC states that to export tariff-free under the Trade and Cooperation Agreement, goods must meet the UK-EU preferential rules of origin. This means that there must be a qualifying level of processing in the country of export in order to access zero tariffs. This applies to EU-originating goods imported and moving through the UK from an EU member state to another EU member state, as well as goods imported from outside of the UK or EU.

These rules are set out in the Trade and Cooperation Agreement and determine the origin of goods based on where the products or materials (or inputs) used in their production come from. Their purpose is to make sure that a reduced rate of customs duty is only given to goods that originate in the UK or EU and not from countries outside the UK and EU member states.

For goods that were imported from the EU and are being returned or redistributed in the EU without obtaining UK origin, the importer in the EU may be able to claim Returned Goods Relief.

Claiming preferential treatment under the Trade and Cooperation Agreement

To benefit from preferential tariffs (a reduced rate of Customs Duty) when importing into the UK or EU, your business will need to:

 

1. Claim preference on your customs declaration.

2. Declare that your business holds proof that the goods meet the rules of origin.

The importer uses a proof of origin to demonstrate that the goods meet the requirements for originating and are qualified to receive preference. In the Trade and Cooperation Agreement, this proof can be either:

 

1. A statement of origin completed by the exporter on an invoice or any other document, including a commercial document.

2. Knowledge obtained and held by the importer that the goods are originating.