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EUR1 Presentation - Jan 2008. Slide 2. Preferential Trade. Is carried out under bi-lateral agreements between the EC and Partner StatesThe agreements are contained in Official Journals (OJs) issued by the European Commission. EUR1 Presentation - Jan 2008. Slide 3. This part of the course relates to EUR1 movement certificates, which Chambers are authenticating on behalf of HMRC.

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    1. EUR1 Presentation - Jan 2008 Slide 1 Welcome to this EUR1/A.TR Training Course on behalf of BCC and HM Revenue & Customs Your trainer for the day is:

    2. EUR1 Presentation - Jan 2008 Slide 2 Preferential Trade Is carried out under bi-lateral agreements between the EC and Partner States The agreements are contained in Official Journals (OJs) issued by the European Commission

    3. EUR1 Presentation - Jan 2008 Slide 3 This part of the course relates to EUR1 movement certificates, which Chambers are authenticating on behalf of HMRC EUR1s

    4. EUR1 Presentation - Jan 2008 Slide 4 The Aim of Preference for EUR1s To give a commercial advantage to indigenous products:- Natural resources Grown or wholly produced Significant manufacturing process

    5. EUR1 Presentation - Jan 2008 Slide 5 Benefits of Preferential Origin Overseas customers may pay a lower rate of duty, or none at all, on goods imported from the EC. Makes EC ‘originating’ goods more competitive

    6. EUR1 Presentation - Jan 2008 Slide 6 Preferential Origin does not mean:- Duty paid status/ free circulation Non-Preferential Origin (different rules of origin apply to EC certificates of origin)

    7. EUR1 Presentation - Jan 2008 Slide 7 Preference Conditions Exported goods must meet the rule of origin Direct Transportation conditions must be met Production must go beyond minimal processing

    8. EUR1 Presentation - Jan 2008 Slide 8 Export Preferences Rules of origin are detailed in Customs notices 828 & 832 Procedures are found in Customs notice 827

    9. EUR1 Presentation - Jan 2008 Slide 9 How exporters can work out if goods ‘Originate’ Confirm Tariff Heading - advise exporters where to obtain this information – Tariff Classification Helpline: 01702 366077

    10. EUR1 Presentation - Jan 2008 Slide 10 How exporters can work out if goods ‘Originate’ Confirm that Preference is available (applicable to Tariff chapters 1-24) useful website for this information: http://mkaccdb.eu.int (Applied Tariff database)

    11. EUR1 Presentation - Jan 2008 Slide 11 How exporters can work out if goods ‘Originate’ Check Rules of Origin in the appropriate Customs Notice 828 or 832

    12. EUR1 Presentation - Jan 2008 Slide 12 ORIGIN RULES - Notes When a rule in Customs notices 828 & 832 refers to materials, it means non-originating materials. All materials are considered to be non- originating, unless proven otherwise All non-material costs (e.g. labour, overheads & profit) are originating.

    13. EUR1 Presentation - Jan 2008 Slide 13 ORIGIN RULES The main types of origin rules are:- 1. Wholly produced Mainly agricultural/ mineral products 2. Change of Tariff Non-originating Heading materials to be in different TH to finished product 3. Stage of production Particularly textiles 4. Percentage rule Limits the value of non-originating materials Some rules are a combination of the above:- E.g. Change of Tariff Heading, plus a percentage rule

    14. EUR1 Presentation - Jan 2008 Slide 14 Wholly Produced

    15. EUR1 Presentation - Jan 2008 Slide 15 Change of Tariff Heading Timber TH 4407, imported from outside the EC is manufactured into a Chair TH 9403 This satisfies the rule of origin which requires non-originating materials to change TH. For preferences purposes, use only the first 4 digits - only one needs to change, eg 7601 to 7602.

    16. EUR1 Presentation - Jan 2008 Slide 16 Stages of Production - Textiles Fleece - scoured, bleached, carded, combed etc. into fibres Fibres - spun into yarn Yarn - woven or knitted into fabric Fabric - CMT (cut make and trim) into garment (usually at least 2 stages of production or finishing operations in EC)

    17. EUR1 Presentation - Jan 2008 Slide 17 Percentage Rule Limits the value of non-originating material For example - TH 9102 – ‘Manufacture in which the value of all the materials used does not exceed 40% of the Ex-Works price’ (Remember ‘material’ means non-originating material)

    18. EUR1 Presentation - Jan 2008 Slide 18 ‘EX’ Rule If the product does not match the description shown against ‘Ex’, apply the general rule at the beginning of the chapter. ‘Ex’ means the rules listed in columns 3 & 4 are exclusive to the goods described in column 2 EX MEANS EXCLUSIVE

    19. EUR1 Presentation - Jan 2008 Slide 19 Origin Rules Exercise 1 Wristwatch, TH 9102 manufactured in the EC as follows:- Case Ł 1 - UK origin Movement Ł 4 - Japanese origin Strap Ł 2 - Spanish origin Battery 50p - Chinese origin Labour/Profit Ł1.50 ------- Total Ł 9.00 (Ex-Works Price) Does the wristwatch qualify for preferential origin for export to Israel?

    20. EUR1 Presentation - Jan 2008 Slide 20 Origin Rules Exercise 2 Electronically Ignited Flashbulbs of TH 9006, manufactured in the EC :-    Which rule is applied when the goods are exported to Norway?

    21. EUR1 Presentation - Jan 2008 Slide 21 Origin Rules Exercise 3 A motor car of TH 8705 is manufactured in the EC as follows:- Engine (US) 1800 Labour 1000 Chassis (Malaysia) 1900 Sundries (Various Non-EC) 400 Profit 1300 Tyres (France) 300 Overheads 1800 Upholstery/Trim (Spain) 1500 EX-WORKS PRICE Ł10,000 Does the car qualify for preferential origin when exported to South Africa?

    22. EUR1 Presentation - Jan 2008 Slide 22 Completion of the Form EUR1 form is completed as per Notice 827 (see example provided) HMRC have started to issue a new version of the EUR1 form (no page 5 & 6). Still OK to complete old and new forms

    23. EUR1 Presentation - Jan 2008 Slide 23 The Chamber checks: Details against invoice (or other backup document) For correct declaration on page 4 For original signature in box 12 on page 1 and on page 4 If you need to reject the EUR1, form BCC C144 (incomplete or incorrect movement certificate C1299) may be completed.

    24. EUR1 Presentation - Jan 2008 Slide 24 Stamping the EUR1 – means: that the document is destined for a preference-giving country (check list in Customs tariff and/or see Customs notice 828 etc) that the form EUR1 has been correctly completed There is no indication that the goods do not qualify for preference

    25. EUR1 Presentation - Jan 2008 Slide 25 Stamping of EUR1 - Mixed Consignments Exporters may be unable to avoid showing originating and non-originating items on their invoices. Exporters must mark the invoice clearly (eg with an asterisk *) to show which goods are non originating Put a statement in Box 8 immediately below the goods description – “Goods marked on the invoice are non-originating and are not covered by this movement certificate” - see notice 827

    26. EUR1 Presentation - Jan 2008 Slide 26 Stamping the EUR1 If all in order, apply HMRC stamp to box 11, page 1 & 3 and sign By stamping the EUR1 you are not saying you have verified that the goods meet the rule of origin and thus qualify for preference Chambers staff must not add to or amend EUR1 (or A.TR) documents on behalf of applicants - under any circumstances

    27. EUR1 Presentation - Jan 2008 Slide 27 Stamping the EUR1 Verification takes place on request to HMRC by overseas customs by completion of page 2 of the EUR1 No other Chamber stamp must be applied to this document, ie the ‘alteration approved’ stamp. The Customs stamp should be used for any alterations.

    28. EUR1 Presentation - Jan 2008 Slide 28 Retrospective EUR1s If the goods have left the country before application for EUR1 is made “issued retrospectively” is stated in Box 7 Detail of place and date of exportation must be provided (copy of bill of lading, airway bill, etc) Full details of procedure – see Notice 827, section 3.11

    29. EUR1 Presentation - Jan 2008 Slide 29 Additional Information Notice 827 also gives information to exporters on: Suppliers declarations – Exporters may need to obtain them if they buy EC materials or finished goods Simplified procedures – regular exporters may apply to HMRC for approved exporter status to avoid completion of EUR1 forms

    30. EUR1 Presentation - Jan 2008 Slide 30 Additional Information If EUR1 is signed by a forwarding agent, ensure there is written authorisation from the exporter (see Notice 827, section 3.3) Application copies must be kept for 3 years minimum Double checking procedures should apply as with EC documents

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