What Are Rules of Origin?
Rules of Origin are the criteria used to determine the economic nationality of a product — in other words, where the product was made or substantially processed.
In the context of UK-EU trade, Rules of Origin are critical because they determine whether goods qualify for the preferential zero duty rate under the UK-EU Trade and Cooperation Agreement (TCA). If your goods qualify, you pay no customs duty. If they do not, standard UK Global Tariff rates apply.
The UK-EU Trade and Cooperation Agreement
Since 1 January 2021, goods traded between the UK and the EU are subject to customs duties. However, the TCA provides for zero tariff rates on goods that meet the relevant Rules of Origin.
This means:
- EU-originating goods imported into the UK → zero UK customs duty (if Rules of Origin are met)
- UK-originating goods exported to the EU → zero EU customs duty (if Rules of Origin are met)
The key word here is originating. Not all goods from the EU are EU-originating goods.
What Makes a Product "Originating"?
A product is considered to originate in the EU (or UK) if it meets one of the following criteria:
1. Wholly Obtained The product is entirely produced or obtained in the EU — for example, agricultural products grown in France, fish caught in EU waters, or raw materials extracted in Germany.
2. Sufficient Processing If the product contains materials from outside the EU, it must undergo sufficient processing in the EU to qualify. The specific requirements depend on the product and are set out in the Product Specific Rules (PSR) in the TCA.
Common PSR requirements include:
- A tariff heading change — the final product must have a different HS code heading from its non-originating inputs
- A value threshold — non-originating inputs must represent less than a specified percentage of the product's value
- A specific manufacturing process — certain operations must be carried out in the EU
Proof of Origin
To claim preferential duty rates, you must provide a valid proof of origin with your import declaration. Under the TCA, acceptable proofs of origin include:
- Supplier's Declaration / Statement on Origin — the EU exporter makes a declaration on the invoice or other commercial document
- REX Statement — a statement made by a Registered Exporter (REX) registered in the EU REX system
- Importer's Knowledge — in some cases, the UK importer can claim preference based on their own knowledge of the goods' origin
What If You Cannot Prove Origin?
If you cannot obtain a valid proof of origin from your EU supplier, you cannot claim preferential duty rates and will pay the standard UK Global Tariff rate.
If the standard rate is 0% for your product (which is the case for many goods), this is not a problem. But for goods with significant duty rates — such as clothing (12%), footwear (up to 17%), or certain food products — the difference can be substantial.
Cumulation
The TCA also allows for bilateral cumulation — meaning that EU-origin inputs used in UK production, and UK-origin inputs used in EU production, can be counted as originating in the country of manufacture.
This is particularly relevant for manufacturers and processors operating cross-border supply chains.
Summary
Rules of Origin can be complex, particularly for products with multi-country supply chains. Getting them wrong means either paying unnecessary duty or, worse, incorrectly claiming preference and facing HMRC penalties.
Our team can assess your products against the TCA Rules of Origin, advise on the correct proof of origin to obtain from your suppliers, and ensure preference is correctly applied on your declarations.