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REPUBLİC OF TURKEYMINISTRY OF CUSTOMS AND TRADE
Directorate General of EU and External Relations
TURKEYRules of Origin
Muzaffer KÜÇÜKEU Expert
RULES OF ORIGININ GENERAL
ORIGIN = ECONOMIC NATIONALITY OF THE GOODS
-vegetable products grown and harvested in Turkey
- live animals born and raised in Turkey
- mineral products extracted from the soil or seabed in the Turkey
Originating in TURKEY
Why do we need the concept of origin?
-Calculation of customs duties while importing the goods
- Implementation of trade policy measures (surveillance and safeguard measures, quotas, anti-dumping duties etc.)
- Statistical data for External Trade
-Country of export is not always the country of origin!
EUROPEAN UNION COUNTRY OF ORIGIN
SWITZERLAND COUNTRY OF EXPORT
TURKEY
-TURKISH LEGISLATION ON THE RULES OF ORIGIN
surveillance and safeguard measures, quotas, anti-dumping duties etc
Certificate of Origin
Customs Law and Regulation
Reduction or exemption from customs duties
EUR.1-EUR-MED Movement Certificate, Invoice Declaration, EUR-MED InvoiceDeclaration Form A and Origin Declaration
Protocol on Rules of Origin Annex to FTA’s.
Article 22 in the Customs Law
Regulations related to Protocols on Rules of Origin.
Council of Ministers’ Decisions for GSP and Kosova
NON-PREFERENTIAL RULES OF ORIGIN
PREFERENTIAL RULES OF ORIGIN
TURKEY-EU CUSTOMS UNION
ANKARA AGREEMENT12 SEPTEMBER 1963
ULTIMATE OBJECTIVE: CUSTOMS UNION
• PREPARATORY PERIOD (1963-1973)• TRANSITIONAL PERIOD (1973-1995) (Additional Protocol – 13 November 1970)
• FINAL PERIOD (31 December 1995-…) (Decision No. 1/95 of Turkey-EU Association Council – 6 March 1995)
TURKEY-EU CUSTOMS UNION
MAIN PROVISIONS OF TURKEY-EU CUSTOMS UNION
Trading of goods between EU and Turkey without any customs duties and quotas
Common external tariffs on imports from third countries (Community Common Customs Tariff)
Basic principle Free Movement of Goods
TR-EU Customs Union covers;
industrial goods and processed agricultural goods
For agricultural goods;
Preferential trade regime based on rules of origin. Decision No.1/98 of Turkey-EU Association Council.
For European Coal and Steel Community goods;
ECSC- Turkey Free Trade Agreement of 1996 has been in force.
TURKEY-EU CUSTOMS UNION
WHICH GOODS ARE CONSIDERED TO BE IN FREE CIRCULATION?
Goods completely obtained or produced in the Community or in Turkey.
Goods coming from third countries if; -the import formalities are completed, - if customs duties are collected in Turkey or in Community, -if the goods in question have not benefited from a total or partial reimbursement of duties or charges
TURKEY-EU CUSTOMS UNION
CUSTOMS UNION +
The framework of customs union established in 1996 goes far beyond the classical concept of a customs union.
•Alignment to common commercial policy (preferential trade agreements of EU and GSP) (Article 16)
• Alignment of Customs Provisions (Article 28)
• Approximation of Laws (in the area of intellectual property rights and competition, public procurements, indirect and direct taxes)
EU-TURKEY PREFERENTIAL TRADE
Industrial products and processed agricultural
products
Agricultural products Coal and steel products
Decision No. 1/95 of Association Council
Decision No. 1/98 of Association Council
FTA of 1996
Free Movement(not based on rules of
origin)
Based on preferential rules of origin
Based on preferential rules of origin
A.TR Movement Certificate EUR.1 and EUR-MED Movement Certificates
EUR.1 and EUR-MED Movement Certificates
INTERNATIONAL ARRANGEMENTS ON PREFERENTIAL RULES OF ORIGIN
Mutual Concessions
- Free Trade Agreements- Preferential Trade Agreements - Decision No 1/98 on the preferential trade of
Agricultural Products with EU
Unilateral Concessions
- Generalised System of Preferences(GSP) -Kosova
OUR FTA PARTNERS
EFTA Countries (Iceland,
Norway, Switzerland & Liechteinstein)
Israel EU (ECSC and
agriculture) Macedonia Bosnia-Herzegovina Morocco Palestine Tunisia
Syria (suspended) Egypt Georgia Albania Montenegro Serbia Jordan Chile S. Korea Mauritius Lebanon, Malaysia(signed,
not entered into force yet) Moldova, Ghana
(initialed)
OUR PTAs
IRAN (entered into
force as of 1st January 2015)
ECOTA (to be entered into force)
TPS-OIC(to be entered into force)
D-8(to be entered into force)
Bangladesh (ongoing)
ONGOING FTA NEGOTIATIONS
MexicoSingaporePeruJapanUkraineColombiaEcuadorFaroe Islands
CameroonCongo D.RSeychellesMercosurGulf Cooperation
Council
TURKISH LEGISLATON ON PREFERENTIAL RULES OF ORIGIN
THERE ARE 7 REGULATIONS AND 2 COUNCIL OF MINISTERS’ DECISION AND 1 COMMUNIQUE RELATED TO PREFERENTIAL RULES OF ORIGIN IN OUR LEGISLATION
TURKISH LEGISLATON ON PREFERENTIAL RULES OF ORIGIN
1) REGULATION ABOUT BILATERAL CUMULATION ON PREFERENTIAL TRADE SYSTEM(GEORGIA and PALESTINE)
2) REGULATION ON PAN-EURO-MED PREFERENTIAL RULES OF ORIGIN(EU, EFTA, EGYPT, MOROCCO, TUNISIA, ISRAEL, SYRIA, JORDAN)
3) REGULATION ON THE WESTERN BALKANS PREFERENTIAL RULES OF ORIGIN (EU, MACEDONIA, MONTENEGRO, SERBIA, ALBANIA, BOSNIA-HERSEGOVINA)
TURKISH LEGISLATON ON PREFERENTIAL RULES OF ORIGIN
4) REGULATION ON THE BILATERAL CUMULATION WITH CHILE
5) REGULATION ON THE PREFERENTIAL RULES OF ORIGIN WITHIN THE CONTEXT OF TURKEY-S.KOREA FTA
6) REGULATION ON THE PREFERENTIAL RULES OF ORIGIN WITHIN THE CONTEXT OF TURKEY-MAURITIUS FTA
TURKISH LEGISLATON ON PREFERENTIAL RULES OF ORIGIN
7) THE COUNCIL OF MINISTERS’ DECISION ON GSP RULES OF ORIGIN
8) COMMUNIQUE ON THE LIST OF BENEFICIARY COUNTRIES TO WHICH GSP SCHEME WILL APPLY
9) REGULATION ON THE IMPLEMENTATION OF THE BILATERAL CUMULATION UNDER GSP
10) THE COUNCIL OF MINISTERS DECISION ON THE GOODS TO WHICH PREFERENTIAL TARIFF MEASURES ADOPTED UNILATERALLY (Kosova)
11) REGULATION ON THE PREFERENTIAL RULES OF ORIGIN WITHIN THE CONTEXT OF TURKEY-IRAN PTA (TO BE ENTERED INTO FORCE SOON)
CUMULATION OF ORIGIN
-BILATERAL CUMULATION
-DIAGONAL CUMULATION
Bilateral Cumulation
S.KOREA
TURKEYFABRICEUR-1
SHIRTEUR.1
Diagonal Cumulation
PAN-EURO-MED(PEM) SYSTEM
Pan-Euro Countries1. European Union2. Turkey3. EFTA Countries
And Faroe Islands
Mediterranean Countries
1. Egypt*2. Syria*3. Palestine4. Jordan *5. Morocco*6. Lebanon7. Tunisia*8. Algeria9. Israel*
PROOFS OF ORIGIN ON PEM SYSTEM
• EUR.1 Movement Certificate
• EUR-MED Movement Certificate
• Invoice Declaration
• EUR-MED Invoice Declaration
What is the difference between EUR.1 and EUR-MED?
1. PAN-EURO SYSTEM; Same rules of origin for all parties. (NO drawback
rule) Existence of FTAs between all parties
2. PAN-EURO-MED SYSTEM;
Diffrent rules on bilateral trade. (Implementation of drawback rule on bilateral trade)
Non-existence of FTAs between all the Parties.
Diagonal Cumulation
EGYPT TURKEYFabric
EUR.MED
EUR.MEDShirt
SWITZERLANDTURKEY
EFTA
EGYPT
(Pan-Euro-Med Preferential Rules of Origin)
VARIABLE GEOMETRY
EU MOROCCO TURKEY
SYRIA
The shirt can not be exported to Syria with a proof of origin under Syria-Turkey
EUR.MEDFabric
EUR.MEDShirt
Diagonal Cumulation
WESTERN BALKAN SYSTEM (SAP CUMULATION)
European Union Turkey
Macedonia Albania
Bosnia-Herzegovina Serbia
Montenegro
Diagonal Cumulation (Western Balkans)
ALBANIA TURKEYFabricEUR.1
ShirtEUR.1
MACEDONIATURKEY
ALBANIA
MACEDONIA
(Pan-Euro-Med Preferential Rules of Origin)
REGIONAL CONVENTION ON PAN-EURO-MEDITERRANEANPREFERENTIAL RULES OF ORIGIN
PEM cumulation- 16 parties:EU, TR, Faroe Islands, EFTAStates, MediterraneanCountries
Western Balkans cumulation – TR, EU, Western Balkan partners
More than 60 Free Trade Agreements (FTA) between these partners• Each containing a Protocol setting identical rules of origin• Modifying rules of origin requires changing all the Protocols
REGIONAL CONVENTION ON PAN-EURO-MEDITERRANEANPREFERENTIAL RULES OF ORIGIN
• diagonal cumulation of origin on a single legalinstrument. No more separate protocols on RoO.• easier revision and update of RoO.• entire Western Balkan region into in the panEuro-
Mediterranean zone of diagonal cumulation.• accession of neighbouring countries in the panEuro-
Mediterraneancumulation zone.• extended opportunities for cumulation
The PEM Convention:A single texton RoO, whichreplaces each Protocolin each FTA
Preconditions to Benefit from Preferential Regime
Being within the scope of the Agreement,
Being originating within the framework of rules defined by the Agreement
Having a valid proof of origin showing originating status of the good,
Being directly transported of the good from the Contracting Party.
WHOLLY OBTAINED PRODUCTS
Products wholly obtained in Turkey:
- Mineral Products extracted from their soil
or from their seabed
- Vegetable Products harvested therein
- Live animals born and raised therein
How is the originating status of the good determined when using non- Turkish originating materials ?
1. Using materials that have originating status of Contracting Party in the production of the good
2. Using materials that have originating status of third country in the production of the good
Contracting/Non-Contracting Parties?
Bilateral Cumulation: Turkey-Chile FTA (only Turkey and Chile)
Diagonal Cumulation: Pan-Euro-Med Preferential Rules of Origin (Ex. Turkey-EU-Egypt)
Non-contracting Party: all other 3rd countries excluded from the Cumulation
If only the materials originating in the contracting parties are used in the production
YOriginating in Turkey
Is value added in Turkey the highest one compared to the value of the materials
originating in each of the contracting parties?Y
originating in TurkeyOriginating in the country
materials of which have the highest value in the
final product
Is working or processing made in Turkey beyond insufficient working and processings?
N
N
Insufficient Workings or Processings
- preserving operations to ensure that the products remain in good condition during transport and storage;- breaking-up and assembly of packages;- washing, cleaning; removal of dust, oxide, oil, paint or other coverings;- ironing or pressing of textiles;- simple painting and polishing operations;- sharpening, simple grinding or simple cutting;- simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations;- affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging;- simple mixing of products, whether or not of different kinds,- slaughter of animals.
If the materials originating in a third countryused in the production
If the materials originating in a 3rd country satisfy working or processings stipulated in Annex II to Protocols on Rules of Origin of FTA’s? (sufficiently worked or processed)
Originating in Turkey
The goods can not acquire originating status
Y
N
ANNEX II (List Rules)HS heading Description of product Working or processing, carried out on non-originating materials,
whichconfers originating status
(1) (2) (3) or (4)
Chapter 2 Meat and edible meat offal Manufacture in which all thematerials of Chapters 1 and 2 usedare wholly obtained
4407 Wood sawn or chipped lengthwise,sliced or peeled, of a thicknessexceeding 6 mm, planed, sanded orend-jointed
8411 TurbojTurbo-jets, turbo-propellers andother gas turbines etler,
Manufacture:- from materials of any heading,except that of the product, and- in which the value of all thematerials used does not exceed40 % of the ex-works price of theproduct
Planing, sanding or end-jointing
Manufacture in which the value ofall the materials used does notexceed 25 % of the ex-works priceof the product
Alternative rule
Ex-Works/Ex-Factory Price-Factory Gate Price
Originating materials (proof of origin bysuppliers declaration or own bookkeeping)- Non originating materials (the customsvalue at the time of importation) - Wages (Labour costs)- Profits- Overheads (e.g. administrative, selling, marketing expenses)- Costs regarding the IPR’s
Ex-Works/Ex-Factory Price-Factory Gate Price
Ex-works price does not include;
-Internal taxes (repaid when the end-product is exported)
- Costs of transporting the end-product to the customer
