Preferential vs Non-Preferential Rules of Origin in Export Documentation

Preferential rules of origin apply to goods claiming reduced or zero duty rates under the UK’s Free Trade agreements and are evidenced using UK EUR1 Certificates, or other forms of declarations stated in the agreement. These rules of specific to each commodity code and are governed by the terms of each trade agreement. To qualify as UK preferential origin, goods must meet product specific rules such as change in tariff classification (e.g. where imported raw materials are significantly transformed in the UK so the final product falls under a different tariff heading).

Some agreements also use the value-added or maximum non-originating material rule (MaxNOM), which limits the proportion of non-originating materials that can be used. For example, a 50% threshold means no more than 50% of the value of the final product can be derived from non-originating materials.

Non preferential rules of origin typically used for certificates of origin, determine origin based on whether goods have undergone substantial transformation in the UK. This means the processing would go beyond minimal operations and results in a new product with different essential characteristics or tariff classification, allowing it to be considered of UK origin.

Substantial transformation includes processes such as chemical reactions taking place and would not apply to processing such as repackaging.