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REPUBLİC OF TURKEY MINISTRY OF CUSTOMS AND TRADE Directorate General of EU and External Relations TURKEY Rules of Origin Muzaffer KÜÇÜK EU Expert.

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Presentation on theme: "REPUBLİC OF TURKEY MINISTRY OF CUSTOMS AND TRADE Directorate General of EU and External Relations TURKEY Rules of Origin Muzaffer KÜÇÜK EU Expert."— Presentation transcript:

1 REPUBLİC OF TURKEY MINISTRY OF CUSTOMS AND TRADE Directorate General of EU and External Relations TURKEY Rules of Origin Muzaffer KÜÇÜK EU Expert

2 RULES OF ORIGIN IN GENERAL

3 ORIGIN = ECONOMIC NATIONALITY OF THE GOODS -vegetable products grown and harvested in Turkey - live animals born and raised in Turkey - mineral products extracted from the soil or seabed in the Turkey Originating in TURKEY

4 Why do we need the concept of origin? -Calculation of customs duties while importing the goods - Implementation of trade policy measures (surveillance and safeguard measures, quotas, anti-dumping duties etc.) - Statistical data for External Trade

5 -Country of export is not always the country of origin! EUROPEAN UNION COUNTRY OF ORIGIN SWITZERLAND COUNTRY OF EXPORT TURKEY

6 -TURKISH LEGISLATION ON THE RULES OF ORIGIN

7  surveillance and safeguard measures, quotas, anti-dumping duties etc  Certificate of Origin  Customs Law and Regulation  Reduction or exemption from customs duties  EUR.1-EUR-MED Movement Certificate, Invoice Declaration, EUR-MED Invoice Declaration Form A and Origin Declaration  Protocol on Rules of Origin Annex to FTA’s.  Article 22 in the Customs Law  Regulations related to Protocols on Rules of Origin.  Council of Ministers’ Decisions for GSP and Kosova NON-PREFERENTIAL RULES OF ORIGIN PREFERENTIAL RULES OF ORIGIN

8 TURKEY-EU CUSTOMS UNION ANKARA AGREEMENT 12 SEPTEMBER 1963 ULTIMATE OBJECTIVE: CUSTOMS UNION PREPARATORY PERIOD ( ) TRANSITIONAL PERIOD ( ) (Additional Protocol – 13 November 1970) FINAL PERIOD (31 December 1995-…) (Decision No. 1/95 of Turkey-EU Association Council – 6 March 1995)

9 TURKEY-EU CUSTOMS UNION MAIN PROVISIONS OF TURKEY-EU CUSTOMS UNION Trading of goods between EU and Turkey without any customs duties and quotas Common external tariffs on imports from third countries (Community Common Customs Tariff) Basic principle Free Movement of Goods TR-EU Customs Union covers; industrial goods and processed agricultural goods For agricultural goods; Preferential trade regime based on rules of origin. Decision No.1/98 of Turkey-EU Association Council. For European Coal and Steel Community goods; ECSC- Turkey Free Trade Agreement of 1996 has been in force.

10 TURKEY-EU CUSTOMS UNION WHICH GOODS ARE CONSIDERED TO BE IN FREE CIRCULATION? Goods completely obtained or produced in the Community or in Turkey. Goods coming from third countries if; -the import formalities are completed, - if customs duties are collected in Turkey or in Community, -if the goods in question have not benefited from a total or partial reimbursement of duties or charges

11 TURKEY-EU CUSTOMS UNION CUSTOMS UNION + The framework of customs union established in 1996 goes far beyond the classical concept of a customs union. Alignment to common commercial policy (preferential trade agreements of EU and GSP) (Article 16) Alignment of Customs Provisions (Article 28) Approximation of Laws (in the area of intellectual property rights and competition, public procurements, indirect and direct taxes)

12 EU-TURKEY PREFERENTIAL TRADE Industrial products and processed agricultural products Agricultural productsCoal and steel products Decision No. 1/95 of Association Council Decision No. 1/98 of Association Council FTA of 1996 Free Movement (not based on rules of origin) Based on preferential rules of origin A.TR Movement CertificateEUR.1 and EUR-MED Movement Certificates

13 INTERNATIONAL ARRANGEMENTS ON PREFERENTIAL RULES OF ORIGIN Mutual Concessions -Free Trade Agreements -Preferential Trade Agreements -Decision No 1/98 on the preferential trade of Agricultural Products with EU Unilateral Concessions - Generalised System of Preferences(GSP) -Kosova

14 OUR FTA PARTNERS EFTA Countries (Iceland, Norway, Switzerland & Liechteinstein) Israel EU (ECSC and agriculture) Macedonia Bosnia-Herzegovina Morocco Palestine Tunisia Syria (suspended) Egypt Georgia Albania Montenegro Serbia Jordan Chile S. Korea Mauritius Lebanon, Malaysia(signed, not entered into force yet) Moldova, Ghana (initialed)

15 OUR PTAs  IRAN (entered into force as of 1st January 2015)  ECOTA (to be entered into force)  TPS-OIC(to be entered into force)  D-8(to be entered into force)  Bangladesh (ongoing)

16 ONGOING FTA NEGOTIATIONS Mexico Singapore Peru Japan Ukraine Colombia Ecuador Faroe Islands Cameroon Congo D.R Seychelles Mercosur Gulf Cooperation Council

17 TURKISH LEGISLATON ON PREFERENTIAL RULES OF ORIGIN THERE ARE 7 REGULATIONS AND 2 COUNCIL OF MINISTERS’ DECISION AND 1 COMMUNIQUE RELATED TO PREFERENTIAL RULES OF ORIGIN IN OUR LEGISLATION

18 TURKISH LEGISLATON ON PREFERENTIAL RULES OF ORIGIN 1)REGULATION ABOUT BILATERAL CUMULATION ON PREFERENTIAL TRADE SYSTEM(GEORGIA and PALESTINE) 2) REGULATION ON PAN-EURO-MED PREFERENTIAL RULES OF ORIGIN(EU, EFTA, EGYPT, MOROCCO, TUNISIA, ISRAEL, SYRIA, JORDAN) 3)REGULATION ON THE WESTERN BALKANS PREFERENTIAL RULES OF ORIGIN (EU, MACEDONIA, MONTENEGRO, SERBIA, ALBANIA, BOSNIA-HERSEGOVINA)

19 TURKISH LEGISLATON ON PREFERENTIAL RULES OF ORIGIN 4) REGULATION ON THE BILATERAL CUMULATION WITH CHILE 5) REGULATION ON THE PREFERENTIAL RULES OF ORIGIN WITHIN THE CONTEXT OF TURKEY-S.KOREA FTA 6) REGULATION ON THE PREFERENTIAL RULES OF ORIGIN WITHIN THE CONTEXT OF TURKEY- MAURITIUS FTA

20 TURKISH LEGISLATON ON PREFERENTIAL RULES OF ORIGIN 7) THE COUNCIL OF MINISTERS’ DECISION ON GSP RULES OF ORIGIN 8) COMMUNIQUE ON THE LIST OF BENEFICIARY COUNTRIES TO WHICH GSP SCHEME WILL APPLY 9) REGULATION ON THE IMPLEMENTATION OF THE BILATERAL CUMULATION UNDER GSP 10) THE COUNCIL OF MINISTERS DECISION ON THE GOODS TO WHICH PREFERENTIAL TARIFF MEASURES ADOPTED UNILATERALLY (Kosova) 11) REGULATION ON THE PREFERENTIAL RULES OF ORIGIN WITHIN THE CONTEXT OF TURKEY-IRAN PTA (TO BE ENTERED INTO FORCE SOON)

21 CUMULATION OF ORIGIN - BILATERAL CUMULATION -DIAGONAL CUMULATION

22 Bilateral Cumulation S.KOREA TURKEY FABRIC EUR-1 SHIRT EUR.1

23 Diagonal Cumulation PAN-EURO-MED(PEM) SYSTEM Pan-Euro Countries 1. European Union 2.Turkey 3.EFTA Countries And Faroe Islands Mediterranean Countries 1.Egypt* 2.Syria* 3.Palestine 4.Jordan * 5.Morocco* 6.Lebanon 7.Tunisia* 8.Algeria 9.Israel*

24 PROOFS OF ORIGIN ON PEM SYSTEM EUR.1 Movement Certificate EUR-MED Movement Certificate Invoice Declaration EUR-MED Invoice Declaration

25 What is the difference between EUR.1 and EUR-MED? 1.PAN-EURO SYSTEM;  Same rules of origin for all parties. (NO drawback rule)  Existence of FTAs between all parties 2. PAN-EURO-MED SYSTEM;  Diffrent rules on bilateral trade. (Implementation of drawback rule on bilateral trade)  Non-existence of FTAs between all the Parties.

26 Diagonal Cumulation EGYPT TURKEY Fabric EUR.MED Shirt SWITZERLAND TURKEY EFTA EGYPT (Pan-Euro-Med Preferential Rules of Origin)

27 VARIABLE GEOMETRY EU MOROCCO TURKEY SYRIA The shirt can not be exported to Syria with a proof of origin under Syria- Turkey EUR.MED Fabric EUR.MED Shirt

28 Diagonal Cumulation WESTERN BALKAN SYSTEM (SAP CUMULATION) European Union Turkey Macedonia Albania Bosnia-Herzegovina Serbia Montenegro

29 Diagonal Cumulation (Western Balkans) ALBANIA TURKEY Fabric EUR.1 Shirt EUR.1 MACEDONIA TURKEY ALBANIA MACEDONIA (Pan-Euro-Med Preferential Rules of Origin)

30 REGIONAL CONVENTION ON PAN-EURO-MEDITERRANEAN PREFERENTIAL RULES OF ORIGIN PEM cumulation - 16 parties: EU, TR, Faroe Islands, EFTA States, Mediterranean Countries Western Balkans cumulation – TR, EU, Western Balkan partners More than 60 Free Trade Agreements (FTA) between these partners Each containing a Protocol setting identical rules of origin Modifying rules of origin requires changing all the Protocols

31 REGIONAL CONVENTION ON PAN-EURO-MEDITERRANEAN PREFERENTIAL RULES OF ORIGIN diagonal cumulation of origin on a single legal instrument. No more separate protocols on RoO. easier revision and update of RoO. entire Western Balkan region into in the panEuro- Mediterranean zone of diagonal cumulation. accession of neighbouring countries in the panEuro- Mediterraneancumulation zone. extended opportunities for cumulation The PEM Convention: A single text on RoO, which replaces each Protocol in each FTA

32 Preconditions to Benefit from Preferential Regime Being within the scope of the Agreement, Being originating within the framework of rules defined by the Agreement Having a valid proof of origin showing originating status of the good, Being directly transported of the good from the Contracting Party.

33 WHOLLY OBTAINED PRODUCTS Products wholly obtained in Turkey: - Mineral Products extracted from their soil or from their seabed - Vegetable Products harvested therein - Live animals born and raised therein

34 How is the originating status of the good determined when using non- Turkish originating materials ? 1. Using materials that have originating status of Contracting Party in the production of the good 2. Using materials that have originating status of third country in the production of the good

35 Contracting/Non-Contracting Parties? Bilateral Cumulation: Turkey-Chile FTA (only Turkey and Chile) Diagonal Cumulation: Pan-Euro-Med Preferential Rules of Origin (Ex. Turkey-EU- Egypt) Non-contracting Party: all other 3rd countries excluded from the Cumulation

36 If only the materials originating in the contracting parties are used in the production Y Originating in Turkey Is value added in Turkey the highest one compared to the value of the materials originating in each of the contracting parties? Y originating in Turkey Originating in the country materials of which have the highest value in the final product Is working or processing made in Turkey beyond insufficient working and processings? N N

37 Insufficient Workings or Processings - preserving operations to ensure that the products remain in good condition during transport and storage; - breaking-up and assembly of packages; - washing, cleaning; removal of dust, oxide, oil, paint or other coverings; - ironing or pressing of textiles; - simple painting and polishing operations; - sharpening, simple grinding or simple cutting; - simple placing in bottles, cans, flasks, bags, cases, boxes, fixing on cards or boards and all other simple packaging operations; - affixing or printing marks, labels, logos and other like distinguishing signs on products or their packaging; - simple mixing of products, whether or not of different kinds, - slaughter of animals.

38 If the materials originating in a third country used in the production If the materials originating in a 3rd country satisfy working or processings stipulated in Annex II to Protocols on Rules of Origin of FTA’s? (sufficiently worked or processed) Originating in Turkey The goods can not acquire originating status Y N

39 ANNEX II (List Rules) HS headingDescription of product Working or processing, carried out on non-originating materials, which confers originating status (1)(2)(3) or (4) Chapter 2Meat and edible meat offal Manufacture in which all the materials of Chapters 1 and 2 used are wholly obtained 4407 Wood sawn or chipped lengthwise, sliced or peeled, of a thickness exceeding 6 mm, planed, sanded or end-jointed 8411TurbojTurbo-jets, turbo-propellers and other gas turbines etler, Manufacture: - from materials of any heading, except that of the product, and - in which the value of all the materials used does not exceed 40 % of the ex-works price of the product Planing, sanding or end-jointing Manufacture in which the value of all the materials used does not exceed 25 % of the ex-works price of the product Alternative rule

40 Ex-Works/Ex-Factory Price-Factory Gate Price Originating materials (proof of origin by suppliers declaration or own bookkeeping) - Non originating materials (the customs value at the time of importation) - Wages (Labour costs) - Profits - Overheads (e.g. administrative, selling, marketing expenses) - Costs regarding the IPR’s

41 Ex-Works/Ex-Factory Price-Factory Gate Price Ex-works price does not include; -Internal taxes (repaid when the end- product is exported) - Costs of transporting the end-product to the customer

42 THANKS FOR YOUR ATTENTION


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