Preferential Origin of Goods

Trade agreements between countries mean that importers are able to obtain a preferential duty rate on certain goods certified as originating from these countries. A preferential rate can either be a reduced rate or nil rate of customs duty. Trade preference agreements are, in most cases, created to enable developing countries to have increased access to the export market. 

To be eligible to claim a preferential duty rate using these agreements, goods must meet origin criteria and valid preference documentation must be produced. 

Commodities that are eligible for preferential duty rates based on the country of origin are detailed on the HMRC trade tariff, which sets out the duties and measures for all imports and exports.

There are currently three main trade preference arrangements and schemes in place that may be applicable to UK businesses importing from outside the EU.

ATR Movement Certificate

An ATR movement certificate is a customs document used for trade between the EU and Turkey. 

The customs arrangement with Turkey enables goods to qualify for reduced duty rates on provision of the original valid ATR movement certificate. This certificate also certifies that the goods with a specific shipment originate from Turkey. 

More information on preferential trade with Turkey can be found using the link below

EUR1 Movement Certificate

An EUR1 movement certificate is the main preference certificate for goods being imported from outside the EU and covers trade between many countries. The EUR1 is a recognised preferential certificate of origin. The original certificate must be stamped and authorised by the customs authority in the exporting country. 

In some cases a declaration of origin on the commercial invoice can substitute the requirement for an original EUR1 certificate, if the total value of the goods is below a specified threshold.

Generalised System of Preferences (GSP) and the Registered Exporter (REX) System

The Generalised System of Preferences (GSP) scheme allows products from various countries around the world to be imported at a reduced or zero rate of duty. In most cases these are developing countries and the scheme assists these countries with increased access to the trade market, overall contributing to their growth. 

The GSP scheme is structured as a sliding scale according to the needs of developing countries:

  • Standard GSP for low and lower-middle income countries
  • GSP+ for vulnerable low and lower-middle income countries
  • EBA (Everything But Arms) for least developed countries 

Since 2017, the requirement for original GSP certification has been in the process of being phased out and replaced by the Registered Exporter (REX) System.

Introduction of the Registered Exporter (REX) System:

The Registered Exporter (REX) System will gradually and eventually completely replace the current system of GSP origin certification based on certificates of origin. This transition period is intended to be complete by 2020. 

Under this system, exporters can apply to become registered exporters. Once approved, exporters are registered in the international database and are allocated an individual REX number. 

A registered exporter is able self-certify the preferential origin of the goods in the form of a statement of origin. The REX statement of origin is shown on the commercial invoice for the goods and contains the exporter’s individual REX number. This REX number subsequently declared on the customs declaration for the goods.
Importantly, the REX system still operates under the authority of the overall GSP scheme. 

Further information on the application of the REX system can be found using the link below:

If have any queries relating to the preferential origin of goods and documentation requirements, please contact our in-house Customs Clearance and Port Health department.