Territoriality principle

 

Article 11 (“Principle of territoriality”) of the rules of origin protocol of the PEM Convention

Territoriality principle means that goods with a preferential origin must be produced within the territory of the parties to a free trade agreement, however processing outside of those territories is allowed provided the total value added does not exceed 10% of the ex-works price of the final product.

  • To get originating status, the production must take place in the territory of the EU or in the territory of the country or countries covered by the preferential trade arrangement. However processing outside of those territories is allowed provided the total value added does not exceed 10% of the ex-works price of the final product.

The Pan-Euro Mediterranean (PEM) Convention make it possible for goods originating in a partner country and exported to a third country to keep their originating status if reimported in the partner country of export after working or processing in the territory of the third country.

The conditions required are:

  • the materials are wholly obtained or have undergone working or processing beyond insufficient operations in a partner country prior to export (see Chapter B.3 on Insufficient Operations);
  • it is shown that the re-imported goods are the result of working or processing carried out in the third country on the previously exported materials;
  • the total added value acquired outside the territory of the partner countries does not exceed 10% of the ex-works price of the final product for which preference is being sought;
  • the working or processing done outside the exporting partner country shall be done under the outward processing arrangements or similar arrangements.
  • the products are not classified under Chapters 50 to 63 of the HS.

If any of the above conditions cannot be complied with the re-imported goods will be treated as non-originating.

Example 4:

Shoes (classified in HS chapter 64 and value of EUR 100/pair) originating in the European Union are exported under the outward processing procedure to Belarus for finishing operations. The shoes are re-imported in the EU where the outward processing procedure is discharged. The value of the shoes is EUR 108/pair. The European Union exporter intends to send the shoes to Switzerland. A proof of preferential origin may be issued or made out in the European Union for these goods in accordance with the provisions of the Pan-Euro-Mediterranean Convention, as the added value in Belarus is less than 10%.

If the final product obtains originating status by applying the general tolerance rule for non-originating materials, the territorial tolerance permitted under this provision cannot additionally be applied. Both tolerance rules cannot be applied together when determining the origin of the final product.

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Mistoqsijiet Frekwenti

  1. Meta t-tariffa tirreferi għall-piż, piż gross jew piż nett?
  2. Kif nista’ nsib id-dazju tal-importazzjoni li japplika għall-prodott tiegħi?
  3. Jekk irrid inbigħ il-prodott tiegħi f’diversi pajjiżi tal-UE, hemm dazji fuq l-importazzjoni biex inħallas kull darba li l-prodott tiegħi jidħol f’pajjiż differenti?
  4. Nista’ nikseb lista ta’ prodotti b’dazju tal-importazzjoni ta’ 0%?
  5. Id-dazji tas-sisa huma applikati fil-livell tal-UE jew f’dak nazzjonali?
  6. Kif tiġi imposta l-VAT fl-UE?
  7. Kif nista’ nikseb l-approvazzjoni biex nesporta l-ħut lejn l-UE?
  8. L-ikel esportat lejn l-UE għandu jiġi minn stabbiliment awtorizzat mill-UE?
  9. Għandi nħallas biex nuża l-Assistent tiegħi għall-Kummerċ għas-Servizzi u l-Investiment?
  10. B’liema lingwi fl-Assistent tal-Kummerċ Tiegħi għas-Servizzi u l-Investiment disponibbli?