Policy & Compliance
A multitude of free trade agreements and proof of origin
Dealing with the technicalities of more than 70 free trade agreements can be a complicated and sometimes confusing business
A n open economy is like-minded economies – and the UK certainly wants to be seen as one. There are currently over 70 free trade agreements (FTA) that regulate trade between the UK and other countries. Many are continuity agreements carried over from the time of EU membership, while some are new trade agreements that have been signed since the EU exit or are still waiting to be signed. As freight forwarders and Customs agents, we do not usually discuss the complexities of FTAs as we are not the ones who buy or sell goods. Origin or triangular generally characterised by its ability to trade with other cumulation do not concern us on a daily basis as we do not decide on whether a product meets specific origin criteria or not. Sector impact But whether or not there is an FTA in place for trade between the UK and another country does have an impact on our sector as duty rate reductions and potential easements to trade usually lead to an increase in demand for goods. What does concern Customs agents on a daily basis though are technicalities such as ‘proof of origin’, which need to be declared on a Customs declaration. Currently, with a plethora of various arrangements, deciding on what constitutes valid ‘proof of origin’ is probably harder than ever. Before the exit from the EU, the majority of FTAs employed hard copy forms such EUR1, EUR-MED or GSP Form A to validate preference. Some more modern FTAs, such as the ones with South Korea or Israel, used an invoice statement,
sometimes accompanied by a trader’s authorisation number. The arrival of the Trade and Cooperation Agreement initiated a wave of simplifications and a departure from a paper copy in favour of invoice declarations and importer’s knowledge. Accustomed to a hard copy certificate, Customs agents found it difficult to accept that an importer’s statement, rather than confirmation from the manufacturer or exporter, could suffice to prove a preferential origin of goods. And to a degree they were right as a widespread lack of understanding of what ‘importer’s knowledge’ should mean resulted in frequent abuse and non- compliance. BIFA’s advice to Members was
advise importers to acquaint themselves with official guidance. But even more ‘traditional’ methods can be confusing. Some preferential origin countries may be covered by more than one free trade agreement. This may become more visible when the Comprehensive and Progressive Agreement for Trans- Pacific Partnership (CPTPP) comes into force. Agents will therefore need to declare a correct preference code depending on the agreement. Confusing picture All this paints a picture that is sometimes less than clear. And authorities realise that, so the current tariff is equipped with an enhanced functionality allowing traders to identify the correct type of evidence of origin for specific FTAs. Yet BIFA realises that it is a complex area, so we are planning further joint sessions with HMRC to assist Members. Further details will be released soon.
“ What does concern Customs agents on a daily basis are technicalities such as ‘proof of origin’, which need to be declared on a Customs declaration
always one of caution when importer’s knowledge was concerned. Not only should Customs agents have valid instructions from traders specifically confirming that
importer’s knowledge is to be used to substantiate a preferential origin claim, but they should also actively
12 | February 2025
www.bifa.org
Made with FlippingBook Annual report maker