The customs origin must be determined for the release for free circulation or for the exportation of goods.
It defines the country in which the goods were produced, manufactured or sufficiently processed. It should be differentiated from the provenance, which is a geographical notion referring to the physical flow of the goods. A change in the customs status of the goods does not modify its customs origin.
Example: Goods manufactured in Brazil are sent from Argentina, without being further processed, and are released for free circulation in Luxembourg. Even if the goods have an argentinian provenance and even if their customs status has changed to Union goods after the customs declaration in Luxembourg, their origin remains Brazil.
Origin covers two different notions:
- non-preferential origin that determines the application of commercial policy measures such as prohibitions and restrictions, as well as "made in" label
- preferential origin that allows to reduce or eliminate customs duties.
If there is any doubt concerning non-preferential origin or preferential origin of the goods, a request for Binding Origin Information (BOI) may be made to the Customs and Excise Administration. The BOI confirms the origin of the goods for a period of 3 years.
Non-preferential origin of goods
On importation in the customs territory of the European Union (EU), non-preferential origin determines the application:
- of the common external tariff (standard, non-reduced customs duty rate)
- of any commercial policy measures (anti-dumping duties, tariff quotas, prohibitions and restrictions, etc.).
It is also used for the "made in" marking on products.
For a product to be considered as originating from a country, the goods must have been entirely obtained there (minerals, plants, animals or goods that have been manufactured exclusively from these products, etc.) or they must have undergone there the last "substantial" processing.
In this latter case, goods produced in two or more countries are considered as originating from the country in which the last substantial processing took place that:
- is economically demonstrated
- is carried out in a company equipped for processing
- resulted in a new product.
The document demonstrating the origin of goods is the certificate of non-preferential origin.
Preferential origin of goods
Preferential origin allows goods to benefit from reduced or nil customs duty rates when they are imported. These privileges are specified:
- in the preferential agreements that the EU maintains with a large number of third countries
- in measures that are decided unilaterally regarding certain third countries.
Each preferential agreement defines the conditions that goods must meet in order to obtain preferential origin status.
All preferential agreements specify that the goods must have been obtained in the country or have been subject to "sufficient" processing in order to be considered as a "product originating in". An example of such sufficient processing is to classify the product obtained in a different 4-digit tariff heading than that of the materials used in the manufacturing. However this rule might differ depending on the nature of the products and the preferential origin agreement at stake.
For example: orange juice (20.09) manufactured in Luxembourg from oranges (08.05) imported from Mexico is considered as of EU origin.
Each preferential agreement must be consulted before exporting or importing goods under a preferential scheme. Indeed, the conditions specified to benefit from the advantages of preferential origin vary according to each agreement.
The status of "product originating in" must be demonstrated by a certificate of preferential origin (in particular EUR1) approved by the customs authorities of the country of exportation or a declaration of origin on a commercial document clearly identifying the products.