UK exporters given 12 months grace of rules of origin documents

Origin Calculation | | MIC Customs Solutions |

British exporters to the EU will not have to submit rules of origin declarations for 12 months as part of a grace period agreed by the UK and Brussels.

British companies exporting goods to the EU will not have to submit rules of origin documentation until 2022, after a 12-month grace period was agreed for the paperwork.

With the ending of the transition period on January 1st, the UK is now officially a 'third country' to the EU. While the Brexit agreement ensures there will be no tariffs on UK-made goods, this does not apply to items that originate elsewhere before being shipped from the UK to the EU.

This means that UK firms exporting to the bloc would normally be expected to provide assurances that their products are locally made to comply with rules of origin requirements.

However, the UK and the EU have agreed that a 12-month grace period will apply before this paperwork is a requirement - although goods sent from the UK to the continent will still be expected to abide by the EU's rules of origin to avoid tariffs.

The move will be especially welcome news for industries such as auto and aerospace manufacturing, which utilise parts sourced from all over the world.

Around 60 per cent of cars made in the UK are exported to the EU, and these firms will now have time to ensure they have the right paperwork in order, rather than having to deal with a sudden and significant change in regulations.

Commenting on the agreement, the UK government said: "Businesses should still ensure that their goods meet origin rules before claiming that they're eligible for zero tariffs, and after the 12-month grace period they could be asked to produce these documents as part of compliance activity."

Rules of origin for the auto industry were a particular sticking point in the Brexit negotiations, with the UK attempting to have parts originating in countries such as Turkey and Japan classed as UK-made for these purposes. However, the EU rejected these efforts.

In particular, electric cars were a major issue, as a large percentage of the value of these items - up to 50 per cent - lies in the batteries, which are usually sourced from Asia.

While the UK has secured an exemption from rules of origin requirements for these parts, it is a temporary reprieve, expiring in 2026.

This means UK electric car manufacturers will have six years to switch their supply chains to European sources or face tariffs of ten per cent on any vehicles deemed to be made up of more than 55 per cent components of non-European origin.