Glossary

The price paid for the product ex-works (i.e. when it leaves the factory). It is a widely used international shipping term. The ex-works price includes the value of all the materials used and all other costs related to its production, minus any internal taxes, which are, or may be, repaid when the product obtained is exported.

In the framework of preferential trade arrangements, exporter means a person or company located in one of the countries which are part of that preferential trade arrangement, who, in accordance with the requirements laid down in the laws and regulations of that country, sells the originating product.

If the application of the common customs tariff duty rate depends on the entry price of the imported consignment, the veracity of the price is checked using a flat-rate import value calculated by the Commission, by product and by origin, on the basis of the weighted average of prices for the product on member countries' representative import markets or on other markets, where appropriate.

Method of exporting goods, where risks and costs are transferred alongside the ship at the port of loading. The customs clearance formalities, costs and risks are borne by the buyer from then on.

Method of exporting goods, where the seller is required to deliver the goods on board the rail. Thus, the seller has to bear all expenses upto and including shipment of goods on behalf of the buyer.

Once the goods are put on board on rail, the property in the goods passes to the buyer and they are at the risk of the buyer, who is responsible for their freight, insurance and subsequent expenses.

Materials that are of the same kind and commercial quality, with the same technical and physical characteristics, and which cannot be distinguished from one another once they are incorporated into the final product. 

Treaty that was precursor to the World Trade Organisation (WTO). It served as a framework for negotiations aiming to liberalise world trade and helped structure the multilateral trading system.

GATT 1947 refers to the old version of the GATT, whereas GATT 1994 is the new version of the General Agreement, incorporated into the WTO, which governs trade in goods.

Import tariffs applicable to all goods not originating in countries falling under the MFN treatment or to goods of unknown or doubtful origin.

Provision that allows manufacturers to use non-originating materials up to a specific percentage value of the ex-works price. However, if the specific working or processing rule already allows the use of a percentage of non-originating materials, the tolerance cannot be used to exceed that amount.

The maximum percentage is always that allowed by the specific rule. The percentage of the tolerance allowed varies from one preferential scheme to another.

Special EU scheme to encourage sustainable development and government. It grants additional preferences to help vulnerable developing countries ratify and implement the international conventions on human rights, workers' rights, environmental protection and good government.