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System of Pan-Euro-Mediterranean cumulation

Summary:

A system of Pan-Euro-Med cumulation of origin is an extension of a previous system of Pan-European cumulation. It therefore operates between the EC and the Member States of the European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland) and Turkey and countries which signed the Barcelona Declaration, namely Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Syria, Tunisia and the Palestinian Authority of the West Bank and Gaza Strip. Faroe Islands have been added to the system as well.

a) General introduction

I.

The pan-European cumulation system was created in 1997 on the basis of the EEA agreement (1994) between the EC, the EFTA countries, the CEEC countries and the Baltic States. It was then widened to Slovenia and to industrial products originating in Turkey (1999).

As result, the pan-European cumulation system is operated between the Community, the Member States of the European Free Trade Association ( Iceland, Liechtenstein, Norway and Switzerland) and Turkey.

The EC has customs unions with Turkey, the Principality of Andorra and the Republic of San Marino. Products covered by the customs unions with Andorra and San Marino are treated in accordance with the provisions of the Origin Protocols to the Agreements. All the relevant Agreements contain Joint Declarations stating that products of Chapters 25 to 97 originating in Andorra and all products originating in the Republic of San Marino are to be considered as originating in the EU by the partner countries.

At present the system is being enlarged to the Faroe Islands and the Mediterranean countries and hence is commonly referred to as Pan-Euro-Mediterranean cumulation.

II.

The Euro-Mediterranean Partnership was launched with a joint declaration of the Foreign Ministers from the European Union and Mediterranean Partners in Barcelona in November 1995 - hence also called the "Barcelona Process". Its overall objective is to provide a framework for strengthened dialogue and comprehensive co-operation in the Mediterranean.

The Partners have agreed upon a strategy aiming at creating an area of peace, stability and shared prosperity through the progressive establishment of free trade between the EU and its Mediterranean partners and amongst the partners themselves by 2010.

The first step towards the creation of this free trade area is the conclusion of a full set of Euro-Mediterranean association agreements between the EU and its partners in the Mediterranean, granting reciprocal trade preferences. These agreements replace the co-operation agreements concluded in the 1970s, which implied unilateral trade preferences. The only co-operation agreement still in force is with Syria. From 1998 to date, Euro-Mediterranean association agreements with Algeria, Tunisia, Morocco, Israel, Jordan, Lebanon, the Palestinian Authority and Egypt have entered into force. The association agreement with Syria was initialled on 18 October 2004.

For more detailed information on the Barcelona Process, see the websites of DG Trade and of DG External Relations.

A system of Pan-Euro-Mediterranean cumulation of origin is being created. For this purpose the Council of the European Union on 11 October 2005 approved a Commission proposal to amend protocols on rules of origin annexed to the various agreements (IP/05/1256 Choose translations of the previous link  ). The system will be applicable between the EC and Algeriapdf, Egyptpdf, Israel, Jordanpdf, Lebanonpdf, Morocco, Syria, Tunisiapdf, West Bank and Gaza Strippdf, the EEA / EFTA countries (Icelandpdf, Norwaypdf and Switzerland (including Liechtenstein)pdf),  the Faroe Islandspdf and Turkey (including coal and steel and agricultural products).

b) Legal framework

This Pan-Euro-Med cumulation is based on a preferential agreement network, the origin protocols of which have to consist of identical rules. A table with the references to the OJs containing the protocols on rules of origin between the EC and the other pan-European partners is included in the User's handbookpdf(494 kB) Choose translations of the previous link  and can also be found in the list of arrangements.

The EC has also published Explanatory Notes to the pan-Euro-Med origin protocols which replaced previous Explanatory Notes applicable to pan-European cumulation (OJ C 90, 31.03.1999 and OJ C 49, 22.02.2002), that applied mutatis mutandis to all the pan-European protocols on rules of origin.

c) Specific provisions

NOTICE: These specific provisions only contain information on the specific, core aspects of Pan-Euro-Med protocols. As long as those protocols are not in place between some countries of the zone, other rules apply. Therefore, always check the common provisions, table of Pan-Euro-Med protocols and list of arrangements.

Cumulation

In the context of the Pan-Euro-Med system, diagonal cumulation means that products which have obtained originating status in one of the 42 countries may be added to products originating in any other one of the 42 without losing their originating status within the Pan-Euro-Med zone.

In Pan-Euro-Med zone, a possibility to cumulate origin diagonally is based on a ''variable geometry'' rule. It means that countries of the Pan-Euro-Med zone can only cumulate originating status of the goods if the free trade agreements including a Pan-Euro-Med origin protocol are applicable between them. Consequently, a country of the zone which is not linked by free trade agreements with the others is practically outside cumulation's benefits. A table indicating protocols which are applicable between various partner countries has been published in the Official Journal and is regularly up-dated.

In parallel, full cumulation is currently operated by the European Economic Area (EEA comprises the Community, Iceland, Liechtenstein and Norway) and between the Community and Algeria, Morocco and Tunisia. These countries apply full cumulation between themselves and diagonal cumulation with the other pan-European countries.

No drawback rule

In the Pan-Euro-Med zone, in principle, in diagonal trade a prohibition of drawback must be respected.

Protocols between the Community and Algeria, Egypt, Jordan, Lebanon, Morocco, Syria, Tunisia and the Palestinian Authority of the West Bank and Gaza Strip provide for partial drawback which is considered as being in line with the no-drawback rule.

The same protocols allow benefiting from drawback in purely bilateral trade between the EC and those countries. This implies that drawback can be granted only if diagonal cumulation has not been applied and a product has not been re-exported from a country of importation to any of the other countries of the zone.

Proof of origin

The originating status of a product is proved by either:

  • a movement certificate EUR.1 or EUR-MED issued by the customs authorities of the exporting country or
  • an invoice declaration or and invoice declaration EUR-MED. This may be made out by an approved exporter or by any exporter for a consignment consisting of one or more packages containing products whose total value does not exceed € 6 000.