Convention on origin

The Regional Convention on pan-Euro-Mediterranean preferential rules of origin, also known as the PEM Convention, replaces the origin protocols of each Free Trade Agreement in force between the Contracting Parties.

The following countries and groupings are Contracting Parties to the PEM Convention:

The individual EFTA states (Norway, Iceland, Liechtenstein and Switzerland), EC, Albania, Algergia, Bosnia and Herzegovina, Egypt, Faroe Islands, Georgia, Israel, Jordan, Lebanon, Kosovo, Morocco, Moldova, Montenegro, North Macedonia, Serbia, Syria, Tunisia, Turkey, Ukraine and Palestine.

EFTA has Free Trade Agreements with all countries except Algeria, Moldova, Kosovo and Syria. 

Revised rules of origin

Most countries in Europe and in the Mediterranean area have acceded to the Regional Convention on pan-Euro-Mediterranean preferential rules of origin , among others the four EFTA-states, the EU, the Faroe Islands, Turkey, the countries in North Africa and the Middle East who take part in the Barcelona Process, Moldova, Ukraine, Georgia as well as the countries on West Balkan who take part in the EUs stabilisation and association process. The most important exception is the United Kingdom, which after its withdrawal from the European Union is not longer a party to the PEM-convention.

The rules of origin in the convention are to be updated with more modern rules. The changes in the PEM-convention’s provisions require unanimity. The parties have for several years discussed and negotiated more liberal rules in the PEM-convention, and proposals for changes are prepared. Nevertheless, the countries have not succeeded on agreeing on the implementation of these changes. Pending the implementation, the countries that have accepted the changes have agreed on applying, in their internal trade between these countries, an alternative set of rules of origin based on the negotiated rules in the PEM-convention. The exporters may choose which set of rules they want to use in every single case, in those agreements where the new rules have been implemented.

The changes will in most cases make it easier to qualify a product as originating. The changes imply among other things a simplification of the product specific list rules, an increase of the percentage of third country materials which can be used in the production, an increase in the ‘tolerance rule’ from 10 to 15 percent in addition to provisions on full cumulation. The definition of the term ‘its vessels’ has been changed, since today’s nationality requirement for officers and crew is removed. This will have a large impact on Norwegian fishing vessels catching fish for export.

The alternative rules also open for parties in a free trade agreement to agree on adjustments between those parties, which potentially can be found in the bilateral protocols on rules of origin. Such adjustments are among provisions on textiles. In some agreements it is explicitly mentioned that an electronic Movement Certificate EUR.1 can be used. Those agreements who have a decision on full cumulation for textiles and use of electronic Movement Certificate EUR.1 are marked with an asterisk.

It has been agreed upon using the alternative rules of origin in the following agreements:

This list will be updated when the free trade agreements implement the new alternative rules of origin.

If the alternative rules are applied, the following must be written in box 7 on the Movement Certificate EUR.1: “TRANSITIONAL RULES”.

If an Origin Declaration is used, the following wording shall be:

“ The exporter of the products covered by this document (customs authorization No………1 ) declares that, except where otherwise clearly indicated, these products are of …………….. 2 preferential origin according to the transitional Rules of origin

The Movement Certificate EUR-MED and the Origin Declaration EUR-MED shall not be used when applying the new alternative rules.

For Norwegian exporters who wish to apply the alternative rules in the trade with the EU as of 1 September 2021, the bilateral agreement with the EU has to be used. The Origin will then be ‘NO’, and it must be written on the proof of origin that it is the new rules which are used. As soon as the EEA agreement is updated with the alternative rules, this article will be updated.

For the export of fish where the bilateral quotas have been fully utilised and the EEA agreement therefore has to be used, the exporters have to await until the new rules will be implemented in the EEA-agreement, and thereafter apply for re-calculation.

Exporters who do not need to apply the alternative rules, may apply the ordinary rules of origin in the PEM-convention with its correct proofs of origin.

Attachments

• The Convention on origin
• Revised rules of origin with annexes