The modernization of the PAN-EURO-MED agreement
In 2019, the modernization of the 2013 MEP agreement has been decided and is not unanimously supported. However, the pandemic has demonstrated the need to accelerate this modernization process to meet the challenges of the third decade of the 21st century.
Context
The new rules of origin stem from the European Commission’s proposal to modernize the EMP Convention in 2019. However, some countries have expressed concerns about the proposed amendments. As a result, the EMP Committee was unable to achieve the unanimity necessary to adopt the proposal. Nevertheless, the EC did adopt a set of proposals on origin. This would allow favorable EMP countries to begin applying the updated rules of origin, without the agreement of those countries that oppose them. Implementation is optional and participating countries implement the new rules on a bilateral and transitional basis, pending unanimous agreement. In other words, two different sets of rules coexist as of September 1, 2021.
Among the most notable changes is the increased flexibility in the calculation of preferential origin criteria, which allows the operator to calculate the value of non-originating materials and the ex-works price of finished products on the basis of an average price or value. Tolerance levels for non-originating materials should be increased from 10% to 15% of the value of the ex-works price of the products. The new EMP rules no longer allow the use of a EUR-MED certificate. Proof of origin now requires a certificate EUR.1 or a declaration of origin. In addition, the validity period of a proof of origin will be extended from 4 to 10 months. The direct transport rule will be replaced by the non-alteration rule. Under the direct transport rule, products should not be altered/processed during transit. Under the non-alteration rule, the addition or affixing of marks, seals, etc. to ensure compliance with requirements is permitted. The adoption of the new set of rules is expected to have an overall positive impact on businesses by providing more opportunities and simplifications for their operations. With this in mind, Customs Bridge has created a tool to facilitate access to information to help transport professionals gain efficiency and flexibility.
