Who Needs to Understand Rules of Origin?
Any business trading goods between the UK and EU that wants to benefit from zero-tariff treatment under the TCA must understand rules of origin. The TCA eliminated tariffs on all goods that qualify as 'originating' - i.e., wholly obtained or sufficiently manufactured in the UK or EU. Goods that do not meet the origin rules are subject to Most Favoured Nation (MFN) duties, which can be significant depending on the product.
For UK freight forwarders and customs brokers, rules of origin expertise is a high-value service. Importers and exporters frequently get origin wrong - either missing out on zero-tariff treatment they could claim, or incorrectly claiming preference and facing penalties when HMRC audits.
What Is Included in Rules of Origin Compliance?
- Product-Specific Rules (PSRs): Each HS code has specific origin criteria - change of tariff classification, value content percentage, or specific manufacturing process. Knowing which applies is the foundation of origin determination.
- Preference Claims: To claim zero-tariff treatment, the importer must hold a valid statement on origin from the exporter. For TCA, this can be a statement on the commercial invoice or a separate origin declaration.
- EUR.1 Movement Certificates: For shipments over €6,000, an EUR.1 certificate issued by customs authorities may be required to support the origin claim.
- Supplier Declarations: UK businesses must obtain supplier declarations from their upstream suppliers to prove the originating status of materials used in production.
- REX System: The Registered Exporter (REX) system is used for certain preference schemes. Under TCA, REX registration is optional for UK exporters to the EU.
- Origin Audits: HMRC and EU customs authorities can audit origin claims up to 3 years after import. Proper documentation is essential.
What Results Can You Expect?
Logistics companies that master rules of origin and market this expertise attract higher-value clients - particularly manufacturers and distributors who trade significant volumes between the UK and EU. Incorrect origin declarations are one of the most common customs compliance failures, so importers actively seek forwarders and brokers who can get it right. This expertise commands premium service fees and builds long-term client relationships.
How Does the Origin Determination Process Work?
First, the exporter determines the HS code of the finished product. The product-specific rule for that HS code is checked against the TCA rules of origin appendix. If the product is wholly obtained (e.g., agricultural goods grown in the UK), it qualifies as originating. If it contains materials from outside the UK or EU, the rule (change of tariff heading, value content, or specific process) must be checked against the actual production process. If the rule is met, the exporter provides a statement of origin. The importer uses this statement to claim preference on the customs declaration. The forwarder or broker ensures all documentation is correctly completed and retained for audit purposes.
Ready to Win RFPs You're Currently Losing?
Get a custom marketing strategy tailored to your logistics company. Free 30-minute digital audit today.