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[PDF] Rules of origin EU-Jordan Association Agreement

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Main features of the simplified

Rules of origin

Agreement

EU-Jordan

Peter Kovacs

DG Taxation and Customs Union

The purposeof preferentialrulesof origin

Imports are generallysubjectto customs duties

Rate isthe so-calledMFN-rate

Countries canconcludeagreementswhich

providefor tariffpreferences(reductionor eliminationof the customs duties)

Tariffpreferencesare onlyfor "originating" goods

Preferentialrulesof origindeterminethe products

thatcanbenefitfromthe tariffpreference 2

Principles of special measure

Relaxation of Rules of origin for trade from

Jordan to the EU

Addition to existing Protocol 3 to the Association

Agreement which covers trade in both directions3

Basic Conditions

The working or processing is carried out in

production facilities in a Development Zone or

Industrial Area named in the decision 1/2016

The production facility contains a proportion of

employment of Syrian refugees

15% in first and second year of entry into force of

the Annex

25% from the beginning of the 3rdyear

Jordanian authorities monitor the respect of the

conditions; they grant an authorisation number to exporters fulfilling the conditions4

What do the new rules imply?

Rules for meeting the origin requirement are the

most generous the EU applies (= GSP LDC)

It covers almost all industrial products

Which Products are excluded?

Products without duties on importation in the

EU (example: Chapter 30 -Pharmaceuticals)

Products for which the rules of Protocol 3 and

GSP LDC are identical (example: agricultural

products)

Additional flexibility provided

by the special measure :

Some examples

Articles of plastics (HS 3922 to HS 3926)

Current rule in Protocol 3

Value of the non-originating materials does not

exceed 50% of the Ex-works price of the exported product

This means

The manufacturer can import non-originating

materials to a maximum of 50% of the EXW price.

Articles of plastics (HS 3922 to HS 3926)

Rule provided in the special measure

Manufacture from any heading except that of the

product (Change of Tariff Heading = CTH) or

Value of the non-originating materials does not

exceed 70% of the Ex-works price of the exported product

Articles of plastics (HS 3922 to HS 3926)

This means

The exporter has the choice

First rule (CTH): no limit on the imports of non-

originating materials (100% is allowed) provided the manufactured product is classified in another heading than the imported materials Second rule: when non-originating materials of the same heading are used in the processing: the threshold is 70%

Cars and car parts (Chapter 87)

Current rule in Protocol 3

Value of the non-originating materials does not

exceed 40% of the Ex-works price of the exported product

Rule provided in the special measure

Value of the non-originating materials does not

exceed 70% of the Ex-works price of the exported product

Textiles

Relaxation for textiles

Introduction of 'single transformation'

compared to 'double transformation' 1 2 3 4 4 3 1 2 3

Clothing chapters 61+62

Currentrules= 'double transformation'

Textile

Pakistan

Weaving

Making-up

Clothing chapters 61+62

Jordan(making-up).

List rules New Measure

Textile

Manufacture from

fabric

Single transformation

performedin Jordan

Preferentialorigingranted

Proof of origin

Documents are the ones currently used

Need for an additional statement

"Derogation Annex II(a) of Protocol 3 [Name of the Development Zone or industrial area] [authorisation number obtained from the

Jordanian authorities]"

With this statement importers and Customs can

easily make a distinction between: exports from Jordan under the special measure exports fromJordan underthe alreadyexistingrules

ThankYou

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